Total Rookie Question... Homeowner's vs Landlord Insurance?

Question

We're doing some financial forecasting as we get ready to purchase our first home ($120k-$150k range) and are trying to project insurances... can someone clarify for me... Do you get a Landlord Insurance Policy IN PLACE OF a Homeowner's Policy, or do you get both?

Any thoughts on what to expect for those types of policies in terms of pricing on a $120k-$150k home?

Thanks in advance!

Any thoughts on what to expect for those types of policies in terms of pricing on a $120k-$150k home?

Thanks in advance!

Thomas S. · Answer

A home is a property you purchase for personal use and needs to have home owners insurance. If you rent out a portion of your home you need to inform your insurance company of that fact. A property you purchase specifically as a investment to be used exclusively and totally as a rental property is business use and must have rental property insurance coverage (landlord).

One is a Home the other is a Income Investment Property.

Sean Blomquist · Answer

@Mitch Reaume that is still pretty vague, but I'm assuming you mean a rental.  In that case, then you are getting a landlord policy.

If you ever decide to do a flip, it would not be a landlord policy, it would then be a vacant property policy...just for future reference.

Josh Dillingham · Answer

in that case you will only need a rental property policy (which can also be known by the following names: Investment property policy, Landlord policy, business policy) You do not need renters insurance.  You're tenants can pay for that on their own if they want it, or if you require them to have it.  you do not need a home owners policy.

Brian Dickerson · Answer

Is the landlord insurance you all are taking about also known as a "fire policy"  form DP-3?    Or is this different

Mitch Reaume · Answer

@Sean Blomquist First investment property*

Sean Blomquist · Answer

@Mitch Reaume it all depends on what you are doing with the home.  You said "purchase your first home".  You need to clarify on if that is going to be your personal residence, or you meant your first investment property.  If an investment property, is it a turn key rental, or are you flipping it?  Those will require two different types of insurance.

Brian Garrett · Answer

Yes that’s correct if you do not plan to actually live in the home.

Mitch Reaume · Answer

@Thomas S. Oooook so when I'm projecting our expenses, I've been doing it wrong assuming that I will need homeowners AND renter's. I will only need renters. Am I understanding that rightly? Thanks for your help!

Jay Jasunas · Answer

@Mitch Reaume

The policy will not cover household furnishings, the renter's own insurance will cover that. The property insurance should be about 80% of what the equivalent homeowners policy cost would be to give you a guideline.

Total Rookie Question... Homeowner's vs Landlord Insurance?

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