How is rental home insurance different than homeowners insurance?

As the name implies, rental home insurance is bought by customers who want to insurance a home they own and intend to rent out to a tenant. Homeowners’ insurance, on the other hand, is meant for people who own their home and will live in it themselves. While that might seem like a superficial difference, there are some major differences when it comes to the kinds of coverage each type of policyholder receives.

First of all, with homeowners insurance, since the insured will be living in the home, they will have personal contents (clothes, jewelry, electronic devices, and so on) that must be insured under the homeowners policy (but see An Intro to Insurance Sublimits to find out whether you will need supplemental coverage).

As a landlord, however, you do not have any insurable interest in the personal property that is kept within the home. Rental home insurance, then, does not need to include personal property coverage.

Homeowners and landlords also have different liability coverage needs. Generally speaking, a landlord is only liable for things related to the maintenance of the building, any furnishings they provide, and any common areas (such as hallways and parking lots). Homeowners normally have extra liability exposures on top of these. For instance, if an owner leaves water on the kitchen floor and a guest slips and injures themselves, then the owner would be liable, whereas a landlord would not.

So, to conclude, the basic idea is that these policies are meant for different types of risks and so have different coverage tailored to fit their requirements.