Landlord Insurance vs. Home Insurance: What Is the Difference?

What if protecting your livelihood was as simple as clicking a button? 

If you own rental property, it is important to protect it from known – unknown – threats. Far too many who rent out homes do not realize the difference between landlord insurance and home insurance. This knowledge may mean the difference between protecting your properties or ending up with six figures (or more) of debt. 

Just what are the most important details about the difference between landlord vs. home insurance? Which one do you need to have, and how exactly does it protect your properties? Keep reading to discover everything you need to know. 

The Essence of Homeowners Insurance 

If you own a home, then you almost certainly have homeowners protection. However, do you know exactly how it works? At its core, this coverage pays for the costs of repairing or replacing your home after a covered peril occurs. The policy also financially protects other structures on the property, including fences, garages, and sheds, plus your belongings inside. 

Home insurance covers personal possessions up to a certain limit, meaning you can protect your most prized possessions in the event of theft or damage. One of the biggest benefits of landlord insurance is liability protection, which can cover medical bills and court costs in the event someone is injured on your property, such as by a dog bite. Insurance can save you major out-of-pocket expenses. 

Diving Into Landlord Insurance Specifics 

Rental property insurance is a specialized form of coverage for properties you rent to others. It, too, covers both the direct property and any detached structures. In most cases, these policies do not protect renters’ personal possessions, but renters can buy their own renters insurance policy if they need the added protection. 

Additionally, rental property coverage offers property owners a specialized form of liability protection, which is why it plays such a large role in real estate investment. And some policies may provide protection against a loss of rental income. 

Coverage Clarity: What Sets Them Apart? 

At first glance, it can be difficult to distinguish landlord vs. home insurance. What are the key features that set these policies apart? As detailed above, rental property insurance does not offer protection for renters’ personal property. Tenants who desire such protection will need to take out their own separate renters policy (remember, you can specify whether renters insurance is required for tenants). 

Landlord coverage or habitational insurance, offers more specialized liability protections tailored to the needs of property owners. For example, it covers scenarios where a tenant may get injured on the property and holds the landlord liable. This coverage may also offer protection against loss of rental income, helping property owners protect their livelihood. 

Stay Law-Abiding: Legalities and Liabilities Uncovered 

As a property owner, it is important to abide by the law, and that means knowing what you are and are not required to do. For example, some owners get stuck on questions like “Do you have to have landlord insurance?” The short answer to that question is “no,” but landlord coverage is strongly recommended because of the liability protections it offers. 

For example, a tenant might slip on your property’s stairs and later sue you because they think the stairs are in poor repair. In this case, even successfully defending yourself from their suit could lead to major out-of-pocket debt. With landlord insurance, your court costs are covered. Plus, the medical bills for the tenant will be covered, and paying those can help you avoid going to court in the first place. 

Making an Informed Choice: Which Policy Suits You Best? 

Now you know that the answer to “Do you have to have landlord insurance?” is “no.” Still, your properties need some kind of protection from unknown threats. In that case, are you better off getting landlord insurance or home insurance on a rental property? 

In short, you are better off getting homeowners coverage for your own home and landlord coverage for any homes you rent out to others. That is because home coverage will protect your personal possessions, and it may offer additional perks like paying for a temporary home if your own becomes uninhabitable. But landlord coverage is specifically designed to protect both you and your property from natural disasters and renters alike. Simply put, it is protection you cannot afford to dismiss. 

Customization for Coverage: Tailoring to Tenancy 

So far, this guide has explored landlord policies and home policies as largely fixed kinds of coverage. But if an exact policy does not suit your needs, it can always be customized for your own specific scenarios. 

For example, you might be able to tweak the policy to better account for your renters, and you might want to adjust coverage for short-term rentals vs. long-term rentals. Below, you will find more information on what you can do in each scenario. 

Rental Realities: Adjusting Policies for Renters 

Your landlord coverage can be customized to offer optimal protection to different aspects of the property, including specific appliances, furniture, electronics, and so on. Some property owners, for example, may increase these protections before renting a home out to very young tenants. Of course, you can always adjust the rent to mitigate your own additional expenses. 

Dual Dynamics: Short-Term vs. Long-Term Rentals 

Some rental agreements are longer than others, and you may want to customize your policy to reflect this. For example, standard landlord insurance is fine if you think your property will be consistently rented, like when one six-month tenant replaces another. If your home is a short-term rental, like through Airbnb, you should add short-term coverage to help protect spaces likely to be shared over time by different temporary tenants. 

Need Landlord or Home Insurance? Get a Quote 

Now you know more about both landlord and home insurance. This includes knowing the features of each coverage and how to decide what is best for you and your property. But there is one more thing you need to know: who you can trust to help protect your livelihood. 

At InsureOne, we are here to protect you and all of your properties from future catastrophes, all while offering the customer service that a busy professional like you deserves. When you are ready to take your property protection to the next level, get a quote online. Of course, you can also pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to find an InsureOne office near you.