Over 10 million Americans now earn at least some of their income from renting out properties. There are many steps to setting up such a form of passive income, and they include things like setting up insurance and other forms of security. However, if you have never rented before, how do you know whether you need homeowners insurance vs. landlord insurance?

The following are some of the key areas of separation in these two types of insurance you should watch out for. When you check each one, consider which is likely more useful for you at present.

Homeowners Insurance vs. Landlord Insurance

In general, homeowners insurance exists for those who both own the rights to and occupy a piece of property. It will cover the structure of a home, the personal belongings inside, as well as any additional expenses in the case of various costly events.

Despite this, commercial property insurance trends suggest more people are picking it up than ever before. This is in part because it covers very different things. For example, rental income loss, or legal expenses related to claims tenants might make.

The following are a few more details related to how these forms of insurance differ:

Property Usage

The coverage offered by homeowners insurance will protect the physical structure of the home during usage. This will include issues caused by general wear and tear over its natural lifespan.

Landlord insurance focuses more on the idea that you are likely to be renting properties and will not be there yourself. There is an understanding that you might need to claim when a renter moves out instead of as soon as an accident occurs. Of course, one of the most important landlord tips related to this is to keep a well-maintained log of damage in the property to prove when it happened.

Personal Belonging Coverage

Homeowners insurance will cover any property within the home that the resident owns. If they come to harm, the person living there will receive the money from the loss.

Landlord insurance will instead only cover items used to service the property. This may include tools such as lawnmowers, or kitchen appliances that come with the property. An insurance company expects a renter to get insurance to cover their own property when leasing a location.

Property Management Risk Coverage

This is a type of coverage limited to landlords. Of course, homeowners tend not to involve themselves in property management related to where they live.

It can cover a wide variety of issues, including:

• Tenant legal disputes
• Wrongful eviction charges
• Maintenance and repairs

This list is not exhaustive, so you should check the details of your policy to see what else it covers.

Ensuring You Receive the Best Policy

Knowing whether you need homeowners insurance vs. landlord insurance can impact whether a claim is successful or not. As such, make sure you connect with an expert to help you with the details of how this insurance could benefit you.

So, contact with the Oliver L.E. Soden Agency today to start your journey toward the insurance policy you deserve.