Posted on: 20 December 2017
It can be very frustrating if you need to sell your home right away because your new home is ready for you to move into. If you cannot sell your current home, you could end up with two mortgage payments to make each month. In this situation, you could opt to rent your home out and become a landlord. This is a great way to avoid having two mortgage payments, but there are several things you should know about the insurance you will need for the home you will rent out.
Insurance Needs Change When You Move Out
Whenever a homeowner moves out of their home and keeps the home, the insurance needs for that home will change. This occurs primarily because homeowner's insurance is based on a person living in the home all the time. When you move out for any reason, there are more risks that something will happen to the house.
For example, if you leave your home for a six-month vacation, your insurance company will want to know. The company will want to add an endorsement to your policy that provides extra coverage for your home while you are gone.
If you decide to rent your home to someone, the insurance company will also want to know simply because the needs for insurance change. When you rent out a house, you will need to switch from a standard homeowner's insurance policy to a rental home insurance policy. This type of policy would only provide coverage for the home's structure, instead of covering the structure and the contents.
Insurance for Rental Property Might Cost More
The second thing you should understand about the insurance you will need is that the cost will likely increase. You might think that a rental home policy would cost less because it provides less coverage, but this is not the case. It will typically cost more because the risks increase.
Tenants do not typically take care of their homes as well as homeowners do. Because of this, an insurance company inherits more risk for a home that is being rented out instead of being occupied by the owner of the house. Your policy will probably increase by around 25% when you make this switch with your insurance.
Having the right insurance for your home is important if you want to be fully protected. If you have questions about your policy or would like a quote for homeowner's insurance, contact an insurance agency like Angel Auto Insurance today.Share