What does liability insurance on a home rental cover?
If you are a landlord renting your home to tenants, you will need a special type of policy just for landlords. Standard homeowner insurance may not cover you for all the risks associated with renting out your home, as they are somewhat different than the risks facing homeowners residing in their own homes.
You should always disclose to your insurance company that your home is being rented to others and that you are not permanently residing in it. This is an important consideration for the insurance company when underwriting your policy. Some insurance companies may consider your home to be at higher risk for damage, as renters may have less at stake in protecting the home from damage than the owner. As a landlord, you also face liability claims from the tenants or their guests if anyone is injured on your property. You lose the ability to control these activities, as you are not always present to oversee activities in the rental home the way you can in your own home. Your landlord’s policy may also cover you for lost rental income in the event of a claim, which is an added benefit if you rely on this income to pay the mortgage.