Why Buy Rental Dwelling Insurance?

Rental dwelling insurance can appear to be very similar to homeowners insurance, but don't be fooled, there are important differences that could make a huge impact on your financial security if you're not aware of these differences.

The rental dwelling policy is usually used to insure investment or rental properties where the owner is not worried about the contents inside the dwelling.  The policy will cover the structure and attached items such as appliances.  In addition, the owner can choose to provide a specified limit for loss of rental income. However, the most important difference can be found in the liability section. You don't have to worry about contents of a tenant; they need purchase their own renters policy to protect their belongings.

Tip. Review your policy thoroughly to determine if liability protection is included or if you have to extend liability coverage to the rental dwelling from your homeowners policy.

Many rental dwelling policies provide no liability coverage.  That may seem strange, but it's a fairly common practice among insurance companies.  Why? They want to insure your house in addition to your rental dwelling so they require liability coverage for the rental dwelling to be added to your homeowners policy.

Tip. Make sure you're working with an experienced agent since your liability exposure is often much greater than the dwelling exposure.