You will need Landlord insurance when you are renting your home regularly. If you are taking in renters occasionally – say, for a few weeks/ months per year – homeowners insurance wouldn’t suffice. This is especially applicable when you live in a separate house from that which you are renting out. You will need two insurance policies here as it covers different circumstances, i.e. one is simple homeowner coverage and the other is coverage of a tenant/ renter.
Landlord Insurance Policy – What Types Are There?
You will find that the Landlord insurance usually falls into three categories, i.e. Dwelling Policy 1, Dwelling Policy 2 and Dwelling Policy 3. These are referred to in common parlance as DP-1, DP-2 and DP-3.
- DP-1 – this will give you cash value of your house, with depreciation.
- DP-2 – this will provide more coverage than DP1 but less than DP3. This would cover a number of regular perils thus listed. If the peril is not on the list, the insurance would not entertain your claim. This would have better terms of reimbursement and more comprehensive cover of your home.
- DP-3 – this is the most common and more advisable among the insurance policies. This comes with replacement coverage which means it will bear the cost of replacing what you lost with new.
Experts advise that the best Landlord insurance policy is the DP3 because it actually allows you to get back your home. Both DP1 and DP2 policies have limitations. With DP-1 policy a 10-year old roof will be valued at next to nothing owing to depreciation. With DP-2 you get cover for only those perils that are pre-agreed in the list. Anything outside it, any special circumstances and you are left on your own.
Is There A Way To Get Cheap Homeowners Insurance?
You will find that the Landlord insurance quote is slightly higher than the homeowners quote by about 20 percent. Recent studies put the average cost at $980 per year. You will pay more if you are renting your premises for short periods. A regular property valued at say, $370,000 plus personal items of $10,000 would have landlord insurance cost about $1,179; if rented occasionally, it would cost $2,170.
For best discounts, use umbrella insurance policies that cover more than landlord insurance. This is especially good if you own more than one house. You can also use online tools to compare prices so you get a home insurance quote that totally suits your requirements and budget.
Or speak directly with an agent at Insurance Medics, call now at 1 (866) 396-9140. Our customer enrollment center is open Monday through Friday from 9:00AM to 6:00PM EST and Saturday from 10:00AM to 2:00PM. We look forward to answering all your questions and having you as a customer.