Does home insurance cover rental property?

Homeowners insurance, landlord insurance or commercial property insurance: which kind of policy do you need to protect your rental property? (iStock)

Whether you just bought an investment property or you're toying with the idea of renting out your own home for a short period of time, you're probably wondering what to do about property coverage. Many new landlords wonder if their existing homeowners insurance policy is enough to cover their rental property.

Unfortunately, there is no one-size-fits-all answer to that question. Instead, the type of coverage that you will need will depend on how you intend to rent out the property. With that in mind, we've laid out some more specifics below. Read on to learn whether or not you need to get supplemental insurance for your rental.

Will homeowners insurance cover rental property?

If you're only planning on renting out your primary residence infrequently and for short periods of time, there's a chance your guests might be able to be covered by your existing homeowners insurance policy.

While some providers will just extend coverage, others will offer you coverage through an additional rider that you can add to your policy. However, in order to obtain coverage in either scenario, you will likely have to inform your insurance provider about the renters ahead of time.

If that type of policy sounds like it might be the right fit for your needs, visit Credible to explore your homeowners insurance options.

On the other hand, if you intend to engage in short-term renting on a regular basis, such as renting out your property through Airbnb, you likely won't be covered under your existing homeowners insurance policy. In this case, there's a good chance that your property will be considered a business and you should look into obtaining commercial property insurance instead.

In the event that you are trying to insure a full-time rental property, homeowners insurance won't be appropriate for you either. In this case, you should look into getting a landlord policy, which is also known as a rental property policy.


How to protect your rental property

While there are a few different types of landlord insurance, it's best to get a policy that includes the following types of coverage:

  • Dwelling coverage: This type of coverage covers damage to the property itself. However, typically, it will only cover damage in case of peril, so it's important to understand what kind of peril is covered under your particular policy.
  • Personal property coverage: Here, the personal property coverage only covers those belonging that are the property of the landlord. Notably, your tenant’s belongings will not be covered. If you want that kind of coverage, your tenant should be required to have renter's insurance as part of your rent agreement.
  • Liability coverage: Liability coverage will protect you from having to pay legal or medical costs in the event that someone gets injured while living in your rental property.
  • Loss of rent coverage: Lastly, loss of rent coverage protects you from missing out on rental payments in the event that your investment property becomes inhabitable due to peril. However, again, you'll want to check to see what specific types of peril are covered under your policy. 

Credible can walk you through each homeowner's insurance policy and coverage. Plus, they can tell you how to save hundreds on homeowners insurance each year.

That said, in addition to your landlord insurance policy, you may also want to look into getting the following types of supplemental insurance for your investment property:

  • Vandalism coverage: As the name suggests, vandalism coverage protects you against deliberate damage to your property.
  • Ordinance or law coverage: Finally, this type of coverage protects against any losses sustained from having to enforce local laws during the repair of a property.


The bottom line

Whether you are thinking of engaging in short-term or long-term renting, you're going to need an insurance policy that adequately protects your property. Whenever you're in the market for an insurance policy, the best thing to do is to shop around. Be sure to compare rates, lenders and coverage options until you land on the policy that is the best fit for you.

If you're ready to take the next step, you can use Credible to compare homeowners insurance companies and shop their plans.