Renting your Warner Robins house with a homeowner policy can cause problems. Here is why.
When you bought your house, the mortgage company that provided your loan probably required you to have an insurance policy on the house as protection from damage, weather or other mishaps. Your lender wants the value of their investment to be protected. BUT, they may not have specified what kind of insurance policy. Here is the difference.
Homeowners insurance policy
A homeowner policy is designed to cover a percentage of the expense of losses to your house caused by:
- Theft
- Fire or lightning
- Windstorm or hail
- Smoke
- Electrical current (power surge)
- Vandalism or malicious mischief
- Freezing of the plumbing system
- Weight of ice, snow or sleet
What is covered?
- A homeowner policy covers the main house, of course, But can also protect outbuildings like a shed or detached garage.
- A homeowners insure will also cover personal items in your house that get damaged as well. Electronics, clothes, furniture and weapons are some items that could be covered with the right policy. It can even cover items you take with you when you move to temporary housing.
- A homeowners policy can also cover legal expenses during a defense case if you are suited by a
- visitor that gets hurt on your property.
Landlord policy (Rental dwelling policy)
If you decide to rent your house, there is a different policy for that. A rental dwelling insurance policy does not cover as much as a homeowner policy. Because of this, rental dwelling policies are usually cheaper. Rental dwelling policies are designed for coverage like:
- Dwelling Coverage: Helps pay for covered repairs or reconstruction of the dwelling and other structures on the same property.
- Garages
- Swimming pools
- Fences
- Storage buildings
- Attached wall-to-wall carpeting
- Outdoor antennas
- Personal Property Coverage: Helps pay for covered losses to your personal property being used in the operation of your rental business. For example, if you are renting the refrigerator, lawnmower or maybe a waterbed. These items could be covered as personal property loss if damaged.
- Loss of Rents Coverage: Reimburses you, for fair rental value lost, if your rental dwelling becomes uninhabitable due to damage by an insured loss.
- Liability Coverage: Provides financial protection against liability lawsuits by the tenant or guests of the tenant.
Here is one more fact that will help you decide if you want to keep your homeowner’s policy while your house is being rented. If the insurance company finds out that the house is being rented at the time of the claimed loss, the insurance company will not pay the claim. A house being rented requires a rental dwelling policy.
To get a rental dwelling policy, simply call your insurance agent and ask. They will ask for up dated information about the house and a copy of the rental agreement. Most insurance companies will give the landlord 30 days to get a house rented or the house will be put in an unoccupied policy, which is expensive. Check your homeowner’s insurance policy, many policies will also cover the house as an owner-occupied residence up to 30 days after the homeowner moves out.
Whether your house is owner-occupied or a rental, if you need advice or help. The Real Estate Problem Solver can help.
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