If you own a building with tenants, the risks to your property and your liability could look very different from someone who lives in their home. Look side by side to see how landlord insurance is different from a homeowners policy to help you choose the right coverage.
Compare landlord insurance vs. homeowners insurance
| Landlord insurance | Homeowners insurance |
|---|
| Who buys this coverage? | Property owners who rent property to tenants | Property owners who live in the property they own |
| Who occupies the property? | Tenants who pay rent to the property owners | The property owner |
| What could the policy protect? | The building structure (walls, roof, etc.), some internal systems (such as HVAC and plumbing) and some landlord-related liability risks | The building structure (walls, roof, etc.), some internal systems (such as HVAC and plumbing), some liability and the personal belongings of the occupant |
| Could it cover personal belongings? | Does not usually cover tenant belongings, but it may cover some property of the building owner | Yes, it usually includes coverage for the owner’s personal belongings |
| What costs could it cover? | May help replace lost rental income if tenants are forced to leave the property temporarily for repairs after a covered event | May help the owner pay for temporary housing if they must move out temporarily for repairs after a covered event |
| Who may be involved in a claim? | Landlords, tenants, customers, vendors or visitors | Home owners, family members, guests or neighbors |
What could landlord insurance cover that homeowners insurance may not?
Landlord insurance could help protect building owners from damages and liabilities that come from renting property to other people. Some covered events could include fire, vandalism, theft, a broken water pipe or storm damages from heavy wind, snow or hail.
Both landlord insurance and homeowners can offer some protections around damages to the building and some claims for medical bills and liability involving tenants and visitors. But it’s usually only landlord insurance that typically includes protection for lost rental income after a covered loss.
Property owners should think ahead about the potential loss of rental income, and what that could mean for mortgages, utilities, property taxes and other monthly expenses on the property you own.
Let’s say flooding damages part of your building and tenants have to move out during repairs.** That could mean you’re not earning your rental income for months — but your bills don’t stop.
Depending on the details of your policy, landlord insurance could help replace some lost rental income while the property is being restored.
When might you need landlord insurance instead of homeowners insurance?
Many property owners don’t start out as landlords. Maybe you move and decide to keep your old property as a rental. But once a property starts generating rental income, it’s good to review whether your current coverage still matches how the property is being used.
If you rent out a property and collect rental income, landlord insurance is often the better fit.
Landlord insurance is commonly used for:
- Office buildings
- Retail properties
- Mixed-use buildings
- Residential rental properties
- Multi-tenant properties
What is landlord insurance?
Landlord insurance is usually for people who own property that they rent to tenants. Instead of protecting where you live, it’s meant to help protect a property that generates income.
That could be a strip mall with several retail tenants, a small office building, a restaurant building, a warehouse or a residential rental property. While every property is different, what they have in common is that other people use the space daily. This can create risks that homeowners insurance wasn’t intended to manage.
Landlord insurance could help cover:
- Damage to the building structure from vandalism, fire, theft or severe weather.
- Medical expenses from injuries involving tenants, customers or visitors in common areas.
- Lost rental income if tenants can’t occupy the property after a covered loss.
Landlord insurance generally doesn’t cover a tenant’s personal belongings. If a tenant’s furniture, electronics, equipment or other personal property is damaged, they would typically need their own renters insurance or commercial property insurance for their protection.
What is homeowners insurance?
Homeowners insurance is usually for people who live in the property they own. It’s meant for your primary residence, not an investment property.
This coverage could help pay for damage to the home itself as well as damages to your belongings. In some cases, it helps a homeowner pay for accident-related expenses if someone gets injured on the property.
For example, if a kitchen fire damages part of your house or a windstorm knocks a branch through a window, homeowners insurance could help with some repair costs.
Homeowners insurance usually covers:
- Damage to the home’s structure.
- Costs for personal belongings, like furniture, electronics and clothing, after a covered event.
- Protection if someone gets injured on the property.
- Living expenses if you need to temporarily relocate after a covered event.
Can homeowners insurance protect a rental property?
Sometimes homeowners insurance can provide coverage when a property is rented occasionally. However, coverage depends on how the property is used.
For example, insurance companies will treat renting out a spare room for a week differently than renting it out year-round. Depending on the situation, a homeowners policy may be supplemented with an add-on to the policy, called a rental endorsement, for occasional rental activity.
