Being a Landlord

Renting your home to others can be a smart financial decision, but make sure to consider the insurance ramifications and liability issues involved.

If you live in a home and then rent it to others, you will need to replace your homeowners policy with a Dwelling Fire policy (Landlord policy).  This addresses the difference in risk associated with a person living in a dwelling who has no financial interest and covers only the building and liability of owner with no coverage for tenant contents.  It will also provide coverage for Loss of Rental Income should a claim leave the home inhabitable for a period of time.  Failing to change a homeowners policy to the Dwelling Fire policy could present problems during a claim and may even result in coverage being denied.

Your tenants should be advised in writing to obtain their own insurance to cover their contents and liability, commonly referred to as a renters or tenants insurance policy.  Not only will this cover their personal property and some liability protection, it will also give them coverage for additional living expenses if they are forced to live elsewhere because of damage to the home. The liability portion of their policy will provide a “first line of defense” against any potential slip and fall claims or accidents caused by tenant negligence. Many standard leases include this and depending on state laws you can require this as a condition in the lease.

Finding a good tenant is the most important part of being a landlord, when you find a good one that cares for your property and pays their rent on time- reward them with a Thanksgiving turkey or something nice during the holidays.  Some more tips for finding a good tenant:

  • Conduct credit and criminal background checks and request two references before leasing to a new renter. The renter’s current landlord may not be the best reference, as they may have unknown motives, so make sure to dig deeper.
  • Make a visit to the potential tenants current home if possible, this will give you an idea of what sort of tenant they are.  If you don’t allow pets carry a dog whistle and give it a discreet blow as this will alert you to any hidden dogs.
  • Don’t rely on a potential renter’s pay stub. Call the employer directly to confirm they work there.
  • Include renters insurance in the lease and request a copy of the tenant’s insurance.
  • Regular and thorough inspections inside and out should be conducted at least every six months.
  • When you are preparing your home for your next renter, make sure all doors and windows are locked to prevent vandalism. It’s also a good idea to change locks between tenants- this is just a cost of doing business.
  • Maintain the home so it’s always in good condition to avoid potential hazards.
  • Do your homework and take the time to select responsible and highly recommended tenants. Completing this step will save time and money.


This entry was posted in HOME INSURANCE, LANDLORD INSURANCE, PERSONAL INSURANCE. Bookmark the permalink.
Join Our Networks Sign up for Our Newsletter