Owning a lease comes with various management obligations. One aspect that is often overlooked is insurance. A rental insurance coverage helps protect landlords versus losses associated with the unit, whether it’s a collection basement in a family home or units in a different building.

Landlord insurance shares some aspects with regular home insurance, but there are important differences. Here’s what you should know when you’re looking for a plan, which includes where to get the best price.

What Does Owner’s Insurance Consist of?

Basically, owner’s insurance covers the unit frame and rental income. That means you can usually claim damage due to stopping, splashing, or various other covered hazards. You can also get back some of the rental income you incurred when repairs occurred.

Additional attachments may consist of liability for those injured in collection, robbery of owner’s property, criminal damage, or loss of rent if the tenant dies.

What’s Usually Not Protected?

Landlord insurance will not cover items in the unit originating from the tenant. This also usually excludes damage damage and losses due to insects and rodents. As with your personal home insurance coverage, you probably won’t have coverage for earthquake or flood damage on land, unless it’s an attachment offered by your insurance company.

When you’re dealing with a new tenant, you may want to recommend that they purchase tenant insurance. Tenants are not legally obligated to do so, but it does provide cover that is included for any loss they may incur. Having this fun discussion early on in the lease may give you both some reassurance.

Why You Need A Separate Plan

Some landlords may think they can rely on their own home insurance coverage if they rent out additional collections or list the home on accommodation-sharing websites like Airbnb. But this can cause problems with your insurance provider. When you enter directly into your home insurance contract, the company evaluates the risk given certain factors. Among those factors is that you are living in the house and not renting out to third parties.

If you don’t get upgraded home insurance while you deal with the tenant, you can cancel your original plan, or face a denial of insurance claim for losses.

Additionally, there are extras you can include in a homeowner’s plan that may not be covered by your home insurance — such as coverage for unfinished rent due to tenant default.

Changing to the Landlord Plan

If you currently own the home in question and need to change insurance coverage to cover the property as rented as opposed to the home the owner occupies, you should contact your insurance company. Your previous landlord plan will need to be terminated and amended with a new plan that properly covers the property for its new condition as a lease.

This is a good time to look around for the best rates for your income property insurance coverage.