Were you planning on renting out your primary residence for a few short rental terms while you are away? Did you know that some insurance companies may allow a homeowners policyholder (assuming they have notified the company) a short-term rental. Other companies will require an endorsement to the existing homeowners or renters insurance policy in order to provide insurance coverage.
Also, renting your home out on a consistent basis throughout the year could constitute a business. Most homeowners policies do not cover businesses conducted in the home and you would probably need to purchase a business policy — specifically either a hotel or a bed and breakfast policy. If you have a second home that you plan to rent for an extended period of time (longer than six months), you will likely need a landlord or rental dwelling policy.
Landlord policies provide property insurance coverage for any physical damage to the structure of the home caused by fire, lightning, wind, hail, ice, snow or other covered perils. It also offers coverage for any personal property you may leave on-site for maintenance or tenant use, like appliances, lawnmowers and snow blowers. The policy also includes liability coverage; if a tenant or one of their guests gets hurt on the property, it would cover legal fees, due to injury claims, and medical expenses.
These scenarios do not include renting out a room or guesthouse on your property. Those situations would likely require you to upgrade your homeowners policy with a “unit rented to others” endorsement.
Before you decide to become a landlord – or if you already are renting out property – talk to your insurance professional to see you have the right insurance policies for your situation. Don’t wait until you are hit with a claim to find out you are underinsured. Take care of it right now.