Did you know there are different types of insurance for homes? The two primary types are owner-occupied and tenant-occupied insurance, each with unique coverage provisions.
Key Differences Between Owner-Occupied and Tenant-Occupied Insurance
Owner-Occupied Insurance: Also known as homeowners insurance, this policy covers properties whether or not they have tenants. It includes coverage for the building, additional structures, and most of the owner’s personal belongings. Essentially, it’s designed to protect your primary residence. In some cases, it might also cover scenarios where you’re renting out a room, but this depends on your insurance provider.
Tenant-Occupied Insurance: Often referred to as landlord or rental property insurance, this policy might be required depending on your location. Even if it’s not mandatory, it’s wise to have it. This insurance covers the property when tenants are present, even if they are there for short stays. Typically, it extends to various types of residential properties, including apartments and condos. Without landlord insurance, you could face significant financial losses.
What Does Landlord Insurance Cover?
The coverage provided by landlord insurance varies based on the policy. These policies are customized to meet specific needs and budgets. They typically cover some of the landlord’s personal property, and provide protection against fire, water damage, natural disasters, and certain legal liabilities.
Given the increasing frequency of natural disasters like floods, tornadoes, and severe storms, it’s crucial to have both owner-occupied and tenant-occupied insurance. Homeowners often overlook the need to switch policies when renting out their property, but this oversight can lead to a loss of coverage. If you’re renting to short- or long-term tenants and an incident occurs, your insurance company might deny your claim if the appropriate coverage isn’t in place.
Can You Have Both Types of Policies Simultaneously?
No, you cannot have both types of policies at the same time. Owner-occupied insurance is more comprehensive compared to tenant-occupied insurance, which mainly covers losses of personal property used for property maintenance. Consulting with an insurance agent who understands the nuances of both policies is advisable if you plan to rent out your property.
For more information on owner-occupied and tenant-occupied insurance policies, contact the Dimmitt Insurance team today!
