One of the more common questions we get from both property owners and tenants goes something like this:
I own a duplex on Long Island. I live in one side and rent the other side out. What’s the difference between renters and landlord insurance? Do I need both?
That’s a great question, and we’ve heard quite a few variants of it. Some tenants call us and say they need landlord insurance. Some landlords who own a few units will ask for renters insurance and then wonder why it’s so cheap. So what’s the difference between renters and landlord insurance? If you own a duplex on Long Island, do you need Huntington renters insurance?
Renters and landlord insurance vary in one primary way. It’s called “Coverage A” or “Dwelling Replacement” on your declarations page. If you have renters insurance, you won’t have that coverage because you’re not responsible for insuring the dwelling. As a renters, you need to insure for liability and personal property. Landlord insurance is going to have coverage on the structure under Coverage A because that’s a big part of what the landlord is insuring.
Renters and landlord insurance have some other differences, as well. Landlord insurance, also known as “dwelling fire” coverage, will generally have only a token amount of personal property coverage. This allows for items supplied by the landlord such as appliances to be covered. Overall, the landlord is unlikely to have a great deal of personal property in the rental unit that would require coverage. A landlord or dwelling fire policy also provides liability and loss of use coverage. In that case, loss of use could also be called “loss of rents” because, properly endorsed, it can cover the lost income from rent after a covered loss such as a fire when the property isn’t bringing in money.
Renters and landlord insurance are written on similar policy forms. The Insurance Services Office, which is a private organization, standardizes policy forms across the country to the extent practical. The DP-3, dwelling fire or landlord insurance, and the HO-4, homeowners renters insurance, can both very easily be traced to their roots in the HO-3, or homeowners insurance policy.
Yes, we said homeowners renters insurance. The HO-4 or tenant policy is not for someone who owns their home, obviously, but it’s derived from the homeowners policy, and it’s part of the homeowners line of business. That’s why ISO entitles it the “homeowners renters” policy.
Renters and landlord insurance both have verbiage changes to reflect that the dwelling is not owner occupied. If you look at any two of those three policies side by side, you’ll see they’re quite similar even though they are aimed at different types of risks.
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