Renting is on the rise, and many homeowners are deciding to rent out their old homes rather than sell them. If you fall into that camp, you’ll want to talk to your insurance agent about changing your current homeowners insurance policy to a rental policy.
Your insurance
A rental policy will protect your home’s structure and a small amount of furnishings in your home. (If you are renting your home furnished, you can add additional coverage for extra furnishings.) So you’d have coverage for your home if lightening ruined its roof or if a visitor slipped and fell on an icy stoop.
Another important benefit is fair rental value. In the event that your home suffers a loss that is covered and your tenant can’t live in your unit until repairs are made, ERIE can provide up to 12 months of fair rental value. This means you won’t lose out on the rental income you may rely on each month. And, if you need more than 12 months, ERIE offers an endorsement that gives you up to 24 months of this coverage.
A rental policy is important for landlords, and you’ll want to get on in place before your first tenant moves in.
Your tenant’s insurance
Once you get a tenant, it’s a good idea to talk to him or her about a renters insurance policy. A renters insurance policy will protect the possessions your renter brings with them—and it can offer you important protection if you’re listed as an additional insured.
When you ask your renter to list you as an additional insured, the liability protection is extended to you from their policy if something unfortunate happened. For example, imagine your tenant burns a candle, and it causes fire damage in your home. As an additional insured on their policy, you would know they have liability coverage to respond to repair the damage.
You would also have liability protection from their policy. Imagine your tenant’s dog bites someone. The victim could seek reimbursement from your tenant’s policy rather than yours. Finally, being an additional insured also entitles you to be notified if the policy is cancelled or is modified. For these reasons, you may want to insert wording into the lease about a tenant having a specific amount of insurance.
You can let your tenant know that renters insurance also benefits them in many ways—and it’s very affordable. In fact, sometimes the discount a tenant receives from buying a renters policy from the same company from which they buy their auto policy is enough to cover the renters policy premium.
Get trusted advice
Becoming a first-time landlord is exciting—and probably also a little overwhelming. That’s why many people seek out help from an insurance professional like a local Erie Insurance agent. He or she can answer all your questions and make sure the right coverage is in place every step of the way.
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