Landlord insurance, and the day your homeowners policy stopped applying
A homeowners policy insures an owner-occupied home. The day tenants move in, the form is wrong, and the carrier finds that out at the claim rather than at the lease.
What this touches
- The building, on a dwelling fire form rather than a homeowners one
- Loss of rents while the property is unliveable after a covered loss
- Liability as the owner, which is a different exposure from living there
- Landlord contents: appliances, and anything you left in it
- Optional vandalism and malicious mischief, which is not automatic on every form
DP-1, DP-2 and DP-3, and why the number matters
Dwelling fire policies come in three broad forms. DP-1 is the most basic and often settles losses at actual cash value, meaning depreciation comes out of your cheque. DP-3 is the closest to a homeowners policy: open perils on the building and replacement cost. The premium difference is smaller than most owners expect and the settlement difference is not. Ask which form you are being quoted, and if nobody tells you, that is the answer.
What moves the premium
- Which form, and whether the building settles at replacement cost or actual cash value.
- Tenant type and lease length, since a long-term lease and a monthly rental price differently.
- Roof age, exactly as on an owner-occupied home.
- Whether you require tenants to carry renters insurance, which several carriers credit.
Make renters insurance a lease requirement
It costs your tenant a few dollars a month, it covers their belongings which your policy never will, and its liability section is what answers when their guest is hurt. Landlords who require it have fewer arguments and, with several carriers, a lower premium.
Tenant damage is not automatically covered
Sudden and accidental damage usually is. Wear, neglect and deliberate destruction usually are not, and that is what a deposit is for. Nobody enjoys hearing this after the fact, so we say it at the quote.
If you are in one of these
Questions people actually ask
I rent one room. Do I need this?
Possibly not, but tell your carrier. An undisclosed rental arrangement is the sort of thing that surfaces at claim time.
Work it out before anybody sells you anything
Four calculators that run in your browser, a page for every situation Florida puts people in, and the claims data for your own county. All of it free, and none of it behind a form. The form is for the other half of the job: when you have read enough and want a person on the phone.
Leave a name and a number and a licensed Florida agent gets in touch. No obligation, and no call from six companies you have never heard of.
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