If you own properties in the U.S., it is important that you protect your investment with the right insurance. For property owners, two main types of property insurance are homeowners insurance and landlord insurance policies. Each is designed for specific situations, and knowing the difference can save you from costly surprises.
Let’s learn how these policies work, their differences, and how to choose the right one for your needs.
What is Homeowners Insurance?
Homeowners insurance is meant to provide liability coverage for properties you live in, also called owner-occupied homes. It protects you, your family, and your belongings in case of unexpected events.
Here’s what a homeowners insurance policy usually covers:
Damage to Your Home: If a fire, storm, or theft damages your house, this policy helps with repair or rebuilding costs.
Personal Belongings: Your furniture, clothes, and electronics are also protected under most policies.
Liability Coverage: If someone gets hurt on your property, your insurance can help cover medical bills or legal fees.
Temporary Living Expenses: If you can’t stay in your home due to covered damage, the policy can help pay for hotel stays and meals.
Homeowners insurance is essential if you live in your house, even part-time. If you have a mortgage, your lender may also require this home insurance.
What is Landlord Insurance?
If you rent out a property, you need landlord insurance. Unlike most homeowners insurance policies, landlord insurance is for tenant-occupied homes or rental properties. It’s designed to protect your income and cover risks associated with renting.
Landlord insurance policies also typically include the following:
Coverage for Rental Property: Protects the building and landlord-owned items like appliances or furniture.
Liability Coverage: If a tenant or guest is injured on your property, this insurance helps with medical or legal costs.
Loss of Rent Coverage: If your property is damaged and becomes uninhabitable, landlord insurance can replace your lost rental income.
Landlord insurance coverage is especially important for long-term rentals or properties you own as investments. It safeguards your property and income from unexpected issues.
How is Landlord Insurance Different from Homeowners Insurance?
While both policies protect against property damage, there are significant differences in coverage, costs, and purpose.
Here’s a quick comparison:
Who Lives on the Property:
Homeowners insurance is for owner-occupied homes.
Landlord insurance is for rental properties where tenants live.
Coverage for Personal Belongings:
Homeowners insurance covers your personal belongings, such as furniture or electronics.
Landlord insurance does not cover tenant belongings. Encourage tenants to get renters insurance to protect their items.
Loss Coverage:
Homeowners insurance offers loss of use coverage to pay for your living expenses if you can’t stay in your home.
Landlord insurance offers loss of rent coverage to replace lost rental income if your property becomes uninhabitable.
Costs:
Landlord insurance is about 25% more expensive than homeowners insurance due to higher risks with rental properties.
When Should You Use Each Type of Insurance?
Knowing when to use homeowners or landlord insurance depends on how you use your personal property.
Use Homeowners Insurance If:
You live in the property as your primary residence.
You rent out a small portion of your home occasionally (but confirm with your insurance company if additional coverage is needed).
Use Landlord Insurance If:
You rent out your entire property to tenants long-term.
You own an investment property that is not your main home.
For short-term rentals, such as those through vacation rental platforms, speak with your insurance company. You may need extra coverage under your homeowner’s policy or a separate landlord policy.
How to Choose the Right Insurance Policy
Selecting the right policy is critical to protecting your property and finances. Here are some steps to guide you through personal property coverage:
Understand Your Property Use
Is this your primary home or a rental property? This determines the type of coverage you need.Review Coverage Needs
Do you need coverage for personal belongings, loss of rent, or liability protection? Be clear about what you need before comparing policies.Get Quotes
Request quotes from several insurance companies to compare prices and coverage options.Ask About Discounts
Many insurers offer discounts if you bundle policies, such as landlord insurance and car insurance.
Protect Your Property with the Right Insurance
Whether you are renting out your property or living in it, the right insurance policy is key to avoiding financial surprises. If you live in your home, homeowners insurance is your best option. For rental properties, landlord insurance is essential to protect your investment and rental income.
Start your search for the right coverage by comparing quotes online. Many websites allow you to see multiple options and choose the one that fits your needs and budget. To help you get started, check out our blog on the best online comparison sites for homeowners insurance and our detailed article on landlord insurance options.
Protect your property and your peace of mind—explore your options today!
