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News
Rental and Renters Insurance
Bulletin – Thursday, February 14, 2013
The housing market has changed greatly in the past few years, with many home owners becoming novice landlords by renting out a home they can't sell. That changes their insurance needs.
They will be relying on you to provide and explain the coverage appropriate for a home now marketed as a rental. Instead of an HO-3 form, you will be quoting a rental policy written on either a DP-1 or DP-3 form.
In contrast, renters insurance (an HO-4 form) is purchased by the tenant to cover his or her personal property, liability, and additional living expenses.
Coverage comparison
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Rental policy
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Renters policy
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Structure
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The policy sets out the conditions and limits for damage to the property.
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Damage to the structure is not covered because it is not a tenant responsibility.
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Personal property
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Coverage for furnishings and other property that come as part of the unit, and are owned by the landlord.
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The policy protects the renter's personal belongings.
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Liability
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Premises liability coverage is optional. No protection extends to the tenant
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Personal liability coverage applies to just the tenant and any dependents living in the home.
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Living expenses
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No coverage is provided for the tenant, even if the loss is covered.
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If the home is rendered unlivable by a covered event, the extra cost of temporary housing is covered.
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These are general points of comparison. The details depend on the terms in the policies.
When you write a rental policy, remind the landlord to tell the tenant that the policy does not cover the tenant. And ask your renters customer what coverage the landlord has on the property.
If you explain how rental and renters insurance complement each other, you may end up with not just one customer, but two.