American Homeowners Association Membership  
American Homeowners Association



Is Your Rental Dwelling Covered?

Remember that rental property you own?
Absentee landlords sometimes have an "out of sight, out of mind" perspective toward their rental properties. Life is good when you're collecting that monthly rent check. But things can go wrong, and before they do, you need to minimize your financial risk.

Take your insurance policy. If you own a detached house, townhouse, or condo rental property, you need a dwelling policy to protect you against fire and other losses--even if you don't live there, according to the American Automobile Association. If your rental property is financed through a mortgage, you really don't have any choice in the matter because you are responsible to the lender for carrying insurance. And we're not talking about a one-size-fits-all, standard homeowners policy. A dwelling insurance policy covers you for replacement or repair of a residential unit damaged by fire, smoke, windstorm, lightning, etc.--and it's customized to fit your needs. It's a little more expensive than a homeowners policy, but well worth it.

Some things to consider covering:

  • If your rental property is furnished and still has some of your stuff, add personal property coverage.

  • Liability coverage can be added to your dwelling policy, or obtained by extending your homeowners insurance on your principal dwelling.

  • Loss of income provision will cover you for lost rent if your tenant has to move out during repairs.
Remember, even if you're not renting it out, insuring a second dwelling may still be a good idea. For example, if you still own your former home after moving into a new one, you'll need a dwelling policy on the old place even though you're not living there. And the summer vacation home needs to be covered, although it can usually be insured under your homeowners policy--unless you own it primarily as a rental.