Do you own a single family house or a townhome that you rent to others? You want to make sure that you're properly covered in the event of a claim and we're here to help you.
Single family dwellings and townhomes which are rented to others are often insured correctly. They cannot be insured under a standard homeowners policy. A standard homeowners policy states that it covers the specified dwelling stated in the declarations which is "used by you as a residence." If you write a homeowners policy for a dwelling which you rent to others or do not occupy yourself, then coverage could be void at the time of a claim.
The proper way to cover a house that you rent to others is by using a dwelling fire policy. A dwelling fire policy is intended to cover dwellings that are rented to others as it does not specify that the location(s) covered must be "used by you as a residence."
Many of the same coverages that apply under a homeowners policy will also apply under a dwelling fire policy, but not all. Coverage for personal property is not automatically included in a dwelling fire policy. This makes sense because typically you, as the landlord, would not have your personal property in a residence which you rent to others. Personal property coverage can be purchased and included in a dwelling fire policy; however this coverage will not apply to your tenants. Personal property/contents coverage only applies to property "owned or used by you or your family members who reside with you." If your tenant would like coverage for their belongings in the rental dwelling, they need to purchase their own renters' insurance.
A dwelling fire policy will include coverage for rents lost if a dwelling is deemed untenable due to a covered claim during the period it takes to repair the damage. This means that if a fire damages the building and your tenants can no longer live in the house, the policy will pay you for lost rent while the dwelling is being repaired.
A dwelling fire policy could either included or exclude liability coverage. Liability coverage does not cover physical damage to the dwelling; it protects you if you are sued for someone being injured on your property. Often, a homeowners policy will allow you to extend liability to another dwelling owned by you. You could choose to either include liability for your rental property on your homeowners policy or choose to include it under your dwelling fire policy. Wherever you include this coverage, it's important to make sure you don't forget it!
Do you think you have the right coverage on your rental dwelling? Give us a call today to discuss.