What is dwelling fire insurance?

Dwelling fire insurance or landlord insurance is very similar to homeowner’s insurance but it is a different policy with greater coverage for those who use the property for rental income.

Dwelling fire insurance, which is commonly called, “landlord insurance,” is very similar to a comprehensive homeowner’s insurance policy. Landlord Insurance is a different policy with greater coverage for those who use the property for rental income or have a vacant home. This policy is often written to cover homes that are occupied by someone other than the owner, such as a tenant. A basic landlord insurance policy typically includes dwelling and liability coverage.

It is important to properly insure your rental investment property so that you are adequately covered in the event of a loss. So, who might be best suited for landlord insurance? Here is a list of common candidates.

  • Landlords who acquire rental and investment property and do not need to insure others’ personal possessions, as they do their own.
  • Owners of properties under construction or renovation.
  • Owners of properties not occupied full time, such as seasonal homes or second homes.
  • Owners of homes that don’t have much cash value, such as inexpensive manufactured homes, mobile homes or old homes.

Before choosing a landlord insurance policy, consider the type of tenant you have, as this can affect the price of premiums. Here are a list of common coverages and benefits of Landlord Insurance.

  • Dwelling: Coverage for materials and supplies used to construct, alter or repair the dwelling.
  • Other structures: Coverage for other structures on the premises that are not attached to the main house.
  • Personal property: Coverage for personal property that you may have in the dwelling as the landlord.
  • Fair rental value: Coverage for loss of rent when risk is not able to be occupied after a covered loss.
  • Personal liability: Provides Bodily Injury and Property Damage Liability coverage
  • Medical: Coverage for payments to others for medical expenses as a result of a covered claim.

Remember: Dwelling fire insurance is a type of insurance that protects the landlord, as well as their property. Just like other forms of insurance, customers will choose their amount of coverage and deductible. The customer will then be required to pay a premium based on coverage, as well as a few other factors. Ask your insurance representative about the exact coverage in any policy you consider. For more information on dwelling fire insurance or to ask an expert, please click on the link below.

Michigan State University Extension offers financial management and home ownership education classes. For more information of classes in your area, visit MSU Extention events page or MI Money Health.

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