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 Posted: Mon May 10, 2010 11:27 am Post subject: Rental property insurance |
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We've rented out our country home. Can we have someone throwing some light on the rental property insurance? Do we have fire insurance benefits coming with it?
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Pelambo
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| Posted: Tue May 11, 2010 12:22 pm Post subject: |
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It protects you from catastrophes. It reimburses you for damages caused due to hooliganism or natural disturbances.
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anonymous00
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| Posted: Tue May 11, 2010 11:38 pm Post subject: |
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| Quote: | | It protects you from catastrophes. It reimburses you for damages caused due to hooliganism or natural disturbances. |
I'm sorry, but that's not a very good answer. "Hooliganism or other natural disturbances??" What's that?
If you have rented out your home on a contractual basis, such as a rental or lease agreement, you definitely need to look at your insurance coverage on the home.
A homeowner's insurance policy, such as an "HO3" policy, requires that the home be owner-occupied. Rental dwellings are normally covered under what's called a "Fire Dwelling" or "Landlord's" policy. You are specifically looking for what's termed in the industry a "DP" form. There are 3 basic types: A DP1, DP2 and DP3, commonly called "Basic, Broad and Special" forms. The DP3 offers the widest scope of coverage and would be my suggestion if the home qualifies.
DP contracts cover the home itself, outbuildings, fences (etc.) and permanently affixed furnishings, such as carpeting, paneling, perm light fixtures, etc. There is typically NO coverage for your tenant's belongings. The policy will also cover your liability and loss of rent should be property become uninhabitable due to a covered loss.
There's more to this than what's presented here. You need to contact your agent to see what he/she can do for you here. This is too important to let slide for any period of time, and if there's still a mortgage on the home, you need to look at your mortgage paperwork to see if this is even allowed. Some mortgages will not allow you to rent out your home to others during the term of the mortgage; you'll have to check on this one.
Let us know if you need any specifics and we'll see what we can do!
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InsTeacher
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| Posted: Wed May 12, 2010 11:11 am Post subject: |
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Hi Teacher..doesn't it protect us from catastrophes and natural disasters like storms?
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anonymous00
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| Posted: Wed May 12, 2010 4:22 pm Post subject: |
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| Quote: | | Hi Teacher..doesn't it protect us from catastrophes and natural disasters like storms? |
Yes, but everyone needs to keep in mind that NOT ALL PERILS ARE COVERED in ANY POLICY. As well, how do you define a "catastrophe?" Floods are catastrophic, earthquakes are catastrophic, but the standard DP or HO policy will NOT cover these exposures.
Just because something is labeled catastrophic, it doesn't necessarily mean it's covered by the insurance contract. The initial answer that you gave:
| Quote: | | It protects you from catastrophes. It reimburses you for damages caused due to hooliganism or natural disturbances. |
is simply too vague, ambiguous and glib. It lacked substance and gist and that's what the OP was looking for.
BTW- TO THE OP: Fire is indeed a covered peril in any DP or HO form.
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InsTeacher
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| Posted: Fri May 14, 2010 7:16 am Post subject: |
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| Quote: | | The policy will also cover your liability and loss of rent should be property become uninhabitable due to a covered loss. |
Do you mean you'll also be covered for your liability towards anyone who gets injured within the property? Will it cover the expenses in the event a lawsuit gets filed?
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Pelambo
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| Posted: Mon May 24, 2010 7:57 pm Post subject: |
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You really need to contact your agent or insurance company to advise them of the change of occupancy and be certain they make the necessary changes to cover this home as a rental property. Without doing this, your coverage is in question.
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InsuranceDude
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