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Homeowner’s Policies vs. Dwelling Policies

    2 minute read

    Homeowner’s insurance is a comprehensive type of insurance that will cover damage to your home. In addition, it protects your family if anyone is injured on your property, or if you or your family accidentally injures or damages other people or their property. However, this only applies when you are living in your home. If you decide to rent out your home, or perhaps you have purchased a rental property as an investment, the rules are different. For such situations, there are Dwelling Policies. When you rent out a home the risk exposure to your home changes. As such, the terms under your homeowner’s insurance policy (which may be limited to owner-occupied homes exclusively) may no longer be appropriate. For example, most owners who rent out their home will have minimal personal property left in the home. Minimal furnishings and time spent on the property translate into minimal coverage needed. Therefore, coverage on your homeowner’s policy will offer more than what you may want to carry when you rent your home.

     Most importantly, you will need to purchase a dwelling fire insurance policy when renting out your home. A dwelling fire insurance policy typically covers:

    • your rental unit
    • other structures on the property
    • the owner’s possessions (but not the tenant’s possessions)
    • lost rental income if the house is damaged and uninhabitable
    • some liability protection for the owner in case of injury or a lawsuit

     However, actual coverage may vary depending on the policy. To get more information about a dwelling fire insurance policy and other renter’s insurance coverage, contact AIS today.

     This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.