November 8, 2018

Residential Rental Property Owners: Do you have adequate insurance coverage?

Do you own a residence that you rent to others?  Or perhaps you rent a room in your home to others, or a backyard cottage/in-law unit to others?  Or perhaps you own a property you rent as a short-term rental through Airbnb?

Insurance for Residential Rental Properties  

If so, when is the last time you reviewed the insurance policy covering the property, to ascertain adequate insurance coverage is in place?

Do you know that your traditional homeowners insurance policy does not cover the property if there are rental activities associated with the property?  Let's say you turn your home  or condo into a rental property, or perhaps occasionally rent a room out through Airbnb.  You must notify your homeowners insurance company and tell them about the change in use of your property, so that your insurance coverage can be modified to reflect the new property use.   For Airbnb rentals, Airbnb also offers insurance coverage.  If you do not have the correct insurance coverage, your insurance policy does not cover the property.   In the event of a fire or other catastrophe, that would be a huge mistake.

Regarding residential rental properties, you can expect your insurance premium  to cost 20% or more than an owner-only occupied property.  Why?  Renters typically do not take as good of care of rental properties compared to owner-occupied properties, resulting in a higher occurrence of insurance claims for residential rental properties.

Questions about insurance coverage on Residential Rental Properties?
About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information about Mary and her professional services visit

Mary Rae Fouts

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