Pasadena, Altadena, Monrovia, San Gabriel Valley, Foothills, CA Landlord/Rental Property Insurance
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There are the two principal categories of Landlord Insurance for Single Family Dwellings or Condos:
1. Tenant-Occupied Dwellings: You are a landlord collecting money as rent from a tenant. This generally refers to long-term tenancy. You are renting it based on a lease for as long as you can. It is an investment property or income-producing property and you don’t live there. Among other things, the liability coverage on this home is different than the liability coverage on your owner-occupied dwelling. It protects you against lawsuit as a landlord. Also, in the event of a claim it will reimburse you for Loss of Rents if your tenants are forced out of the house because of a fire and are no longer obligated to pay rent. If there is a loss that is covered by your policy, like a fire, the house will sit empty until fixed and you would otherwise be deprived of the income but for the Loss of Rents coverage.
2. Vacation Rental, Seasonal Rental or Short-Term Rental Dwellings: This is the second type of Landlord policy. It usually involves short term tenancies with multiple different occupants during the year. This is really a business. It requires scheduling, deposits, cleaning, etc. It can include Bed and Breakfast-type rental dwellings. Very few companies want to insure short-term rentals. As you can imagine this is a much higher risk than a long-term tenant. It was not that long ago when such a policy had to be written as a commercial insurance policy. Vacation Rental use may be mixed with a Secondary or Vacation owner-occupied use where you occupy the house some parts of the year and rent it out during other parts of the year. Part of the year you are the owner-occupant and part of the year you are a landlord.
The question is: What do you plan to do with your rental property? Rent it out to a long-term tenant, rent it on a short-term basis and occupy it yourself at various times throughout the year or rent it short-term all year around? This decision is important in order for your insurance to properly cover you. When you make the transition the house from an owner-occupied to tenant-occupied dwelling, you become a landlord. There is important coverage in a landlord policy that is not in a owner-occupied homeowner policy.
You know what to do if you have questions about your landlord insurance quote, right? Call me, Steve, Your Insurance Pal.