Property Insurance

Should I change my Homeowners Insurance Policy to a Rental Investment Policy?

We consider it our obligation to assist you in making an informed decision when it comes to insurance coverage. We want to ensure that you and your investment are fully protected. Rental Property Insurance (also known as Landlord Insurance) is more comprehensive than a homeowners’ policy for rented properties. If you are renting a home, you need insurance that protects you in ways that a standard homeowner policy does do not. Homeowners insurance will cover damage to - or loss of - your property, but Landlord Insurance offers greater protection for your property, which results in better financial protection for you.


Liability Coverage: Homeowner’s insurance will cover damage to your structure, but a Landlord Insurance Policy will include Liability Coverage that will protect a property owner if someone is injured on their property, in some cases it will include legal fees if you are sued – check with your insurance carrier. Experts recommend that landlords have at least $1 million in liability insurance.

Lost Income: Homeowners insurance doesn't cover you for lost income in an event that renders your property uninhabitable. Many people are unaware that Landlord Insurance will cover lost income during repair and renovation if your home is damaged beyond livability. Note, however, that Landlord Insurance only covers income lost because of a covered hazard; it won’t compensate you for vacancies. As always, confirm all information with your insurance carrier.

Ultimately, it is your choice as the owner of your real estate investment.

What is an “Additional Insured”?

This term is used to describe a person or entity who is added to an insurance policy in order to operate the insured asset instead of, or on behalf of, the owner of the insured asset while maintaining protection from injury or damage caused by the asset or surrounding circumstance.

For example:

In terms of vehicle insurance, an additional insured person is able to operate a vehicle instead of, or on behalf of, the owner of the vehicle while maintaining the extended coverage that the additional insured status provides in the case of damage or injury that is caused by another driver or the vehicle itself.

Why does my Property Management Company need to be added to my Landlord Insurance as an Additional Insured?

Just as described in the vehicle example, when an Owner adds their Property Manager as an additional insured, the Property Manager is able to operate the rental property instead of, or on behalf of, the owner while maintaining the extended coverage under the Owner’s insurance policy for damage or injury that is caused by a trespasser or the property itself.

A Property Manager does not have financial interest in an Owner’s rental investment as they are not part or co-Owner. However, they do take on the risk and liability as if they are an Owner. In essence, the Property Manager assumes all the liabilities of an Owner as they are the Owner’s agent while operating the property. Without the extended coverage of additional insured status on an Owner’s Landlord insurance, your Property Manager is vulnerable to claims and lawsuits arising, not from actions or fault of the Property Manager, but from the property itself - such as a tenant or their guest injuring themselves at the property or damage to a tenant or their guest caused by an electrical fire, fallen trees, burst pipes, etc.  Because the relationship between Owners and their Property Managers is a team effort, property Owners naming their Property Management company as an additional insured is an industry standard.

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