What insurance do you need for a rental home in Atlanta?

It's important to get the right insurance for your rental home.

There are all sorts of circumstances that lead to someone renting out a home. You may have turned your attention from selling your old home to renting it out. You could have decided to downsize to an apartment or condo, and you’re using your old Atlanta house as income. Or you might have just purchased a second home for the sole purpose of renting it out. However, a normal home insurance policy isn’t quite the right way to protect the rental home. Here’s a look at how to insure your Atlanta property the right way if you’re putting it up for rent.

Why won’t a normal home insurance policy work if I rent out my home?

Here’s the thing. A traditional home insurance policy by itself is only built to handle the risk of a primary owner living there and that primary owner’s guests. It’s not made to handle the risk that comes with different groups of people living in the home on rotation. Renters come and go, so they have less invested interest in taking care of the property than someone who purchased the home and plans to live in it for much longer. Insuring a rental home is a different type of risk because there’s a lot more variety in situations, personalities, and overall traffic to the home that may cause more damage to the property than a typical homeowner.

So, what type of insurance do I need for renting out a home?

You’ll need a dwelling fire policy (or DP policy) that accounts for your rental property’s varying occupants. A dwelling fire policy is very similar to a home insurance policy in how it can cover liability and property damage for the home itself. DP policies are generally written on a yearly basis.

Does my insurance cover my tenant’s belongings?

It’s important to note that a dwelling fire policy only helps protect you as a landlord and your investment in the house’s structure. If something were to happen to your tenant’s things inside the home, it probably wouldn’t be covered under your dwelling fire policy.

That’s why it’s important to talk to your tenants about getting their own separate renters’ insurance. That could offer the type of coverage they need to repair or replace their things if they’re damaged by an event like a fire, theft, or even falling objects. Renters insurance can also give your tenant their own liability coverage.

What if I can’t find a tenant for my rental home?

Sometimes the rental market isn’t all that friendly to landlords. However, even if your insurance company knows that the home is a rental, you may not be covered for perils that happen to the home when it’s vacant. That’s why it’s vital to check your insurance policy to make sure you know how long the policy will cover a vacant house.

Typically, a policy will allow at least 30 days of vacancy. So, while you do have a buffer of time for your tenant search, don’t cut things close!

What factors affect my rental home insurance rate?

Some of the factors that might affect the cost of your dwelling fire policy are:

Rates can also greatly differ from carrier to carrier and from plan to plan. Usually, it’s a good idea to have your DP policy with the same carrier as your primary home insurance since doing so could help you get a better rate. Plus it’s just easier that way.

Consider umbrella insurance

You may also want to consider personal umbrella insurance if you’re renting out your house. Hospital bills can get expensive. So, if one of your renters is hurt on your property, it’s nice to have a bigger cushion of coverage with those medical bills if necessary. Personal umbrella insurance can help provide liability coverage that goes above and beyond the coverage offered by your underlying insurance policy. (It essentially sits on top of your underlying policy…like an umbrella! Get it?)

Overall, if you’re renting out a second house in Atlanta, you want to make sure that you and your money-making investment are protected for years to come. There are plenty of risks to consider when different people rent out your home year after year. And our insurance experts can help! Call us today, fill out our online form, or LiveChat with an agent to find out just how much you can save while you rake in the dough on your Atlanta rental home!