Insurance For Rental Homes


With the housing market having been in the tank, home values underwater, and mortgages hard to obtain, many people have turned to renting their homes. They do so for many reasons, but a primary reason is that the homeowner is hoping the lost market value will come back soon. However, if you rent your home, you have turned your home into a commercial enterprise Your homeowner’s insurance is not the proper insurance for the property. In fact, in many cases, you could wind up with an uninsured home and no liability coverage if you do not report the change in status to the insurance company.

The insurance company needs to know what they are actually insuring. The actual risk of loss for a homeowner is different when a renter occupies the property than the homeowner. Why? One reason is that it is assumed that a homeowner will be more careful with the property than a renter.

The change in status of the home is usually considered a material change in conditions. The possibility of a loss to the property has now changed. If that material change is not reported to the insurance company and a loss occurs to the home, the insurance company may cancel the policy and refund the premium to you. So, what does that mean? – it means that if you rent your house out, and it burns down, with the renter occupying the property, the company may have the option of denying the claim and refunding your premium payments. So, remember to tell your insurance company, in writing about the change in homeowner status if you leave and rent out your home.


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