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Landlord Policy & Landlord - Tenant Policy:

Specifics of the Landlord Policy & The Landlord - Tenant Policy

When a homeowner is going to be away from the home for over 6 month, many will consider renting the home to friends, family or tenants. It is important to remember that a landlord policy is needed in almost ALL of these cases. Most homeowners believe if a friend or family member is living in the house and not paying rent (formally), they can stay with the current homeowners insurance policy and there is no need to make a switch. This is often a catastrophic mistake. The fact that an owner is receiving rents is not the main factor on whether you need to cancel your existing homeowners insurance policy, and replace it with a landlord tenant policy also called a tenant boarder policy.

One of the largest mistakes made by insured and also insurance agents, is the failure to switch a policy when a close friend or even a family member (like a cousin) is living in the house "for free" while the owners are away. If you feel you are insured properly and do not need to make a change, always get this in writing from your agent or the insurance company. Do not take anyone's word for it.

The cost for a tentant boarder policy is not going to be nearly as expensive as a vacant homeowners policy and many more insurance companies are willing to take this risk and offer these policies where in contrast, most insurance companies will not insure a vacant home.

As we discussed with vacant homes, tenant policies are also usually Dwelling Policies and do not offer the same degree of coverage as HO3 or HO5. From the landlord's perspective, you want to make sure the house has good coverage but you also want to make sure you have enough liability insurance as well. We also feel it is very important for the landlord to ensure that the tenant is carrying their own renters insurance policy.

The tenant will need to carry their own insurance to cover their personal property (clothes, furniture, i-pod etc) AS WELL AS liability coverage. If the tenant has a party and someone falls and is injured, and then sues, this should be the responsibility of the renters insurance policy carried by the tenant. Homeowners can avoid a large degree of headache when they rent out a home or have someone else living in the home, by making sure the "tenant" (whether they are paying rent or not), are carrying the proper renters insurance.

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