Do you ever rent out your home?
Did you know there are different policies you need depending on how the property is occupied? Occupancy options are owner-occupied, tenant-occupied, or a mix of owner and tenant.
The differences in owner-occupied and tenant-occupied insurance
Owner-occupied: A property that is occupied 6-12 months out of the year by only the deeded owner(s), is an owner-occupied policy. This policy covers the main dwelling, other detached structures on the property, the owner’s personal property, and personal liability up to the policy limits listed on your declarations page. Any optional coverages you have will be listed on the declaration page as well.
Tenant-occupied: A property that is occupied by a tenant for any amount of time (short-term, monthly, or annually) requires a dwelling fire (landlord) policy. This policy also provides coverage for the dwelling, detached structures, owners’ personal property, & liability. The difference with this policy is it will also include coverage for vandalism, or damages caused by a tenant, lost rental income if the property sustains damages and can’t be occupied, and the carriers rate for the higher risk of a tenant occupying the home vs the homeowner.
Mixed-use occupancy:
If your property is both owner-occupied and rented for only 3-4 months out of the year, you will either want to have a landlord policy for the full 12 months or at least change the to a landlord policy before the tenants move in. This will ensure your assets are properly covered. Having the correct policy in place will protect you from a carrier denying a claim because of the occupancy being different than disclosed on the policy application.
*Important note, tenants should obtain their own insurance policy for their personal property. The property owner’s policy will not cover damages to the tenant’s personal property.
With so many unexpected natural disasters occurring from flooding, tornados, and severe thunderstorms, making sure you have the correct policy and coverages in place should be a priority. It’s easy for homeowners to forget to change the type of insurance policy they have if they rent out the property, but that simple slip-up could result in a loss of coverage. If you’re renting to a short or long-term tenant and something happens, your insurance company could deny your claim.
Not sure what you need? Give us a call.
Our agents are ready to guide you through the process of making sure you are properly covered with the most comprehensive coverage at the best possible rate.
For more on owner-occupied VS tenant-occupied insurance policies, contact the Dimmitt Insurance team today!