| Rental dwelling
insurance can appear to be very similar to homeowners
insurance, but don't be fooled, there are important
differences that could make a huge impact on your
financial security if you're not aware of these
differences.
The rental dwelling policy is usually used
to insure investment or rental properties where
the owner is not worried about the contents
inside the dwelling. The policy will cover the
structure and attached items such as appliances.
In addition, the owner can choose to provide
a specified limit for loss of rental income.
However, the most important difference can be
found in the liability section. You don't have
to worry about contents of a tenant; they need
purchase their own renters policy to protect
their belongings.
Tip. Review your policy thoroughly
to determine if liability protection is included
or if you have to extend liability coverage
to the rental dwelling from your homeowners
policy.
Many rental dwelling policies provide no liability
coverage. That may seem strange, but it's a
fairly common practice among insurance companies.
Why? They want to insure your house in addition
to your rental dwelling so they require liability
coverage for the rental dwelling to be added
to your homeowners policy.
Tip. Make sure you're working
with an experienced agent since your liability
exposure is often much greater than the dwelling
exposure.
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