Do You Need to Change Homeowner’s Insurance If You Rent Your House Out?


If you are currently living in your own home and thinking about downsizing to an apartment or condominium, it may be advantageous to keep your current home and rent it out to a child, relative or other individual. If you do decide to do this, you will need to take care of a few adjustments before you can start renting to new tenants.

Making Adjustments Before Renting Your Home

One of the first steps that you will need to take before renting out your home is to remove all valuables and personal possessions. In addition, you will also need to make sure that the home does not contain any fire hazards and is protected with carbon monoxide detection systems and smoke alarms. You also have to decide if you want to keep your current dryer and washing machine. These may be a nice incentive for attracting a new tenant. Also, you’ll want to remove your name off of the utility bill or talk to your utility company about switching this over to tenants once they occupy the premises.

Changing Homeowner’s Insurance Policy

The rules are different for ensuring your personal home versus a property that you are renting. You will need to stop the coverage of homeowner’s insurance that you are currently using and swap it for insurance that covers only the house. This may be cheaper than your current home insurance as a rental home policy does not include coverage for damages done to interior furnishings, theft or loss of valuable items that are being kept on the premises.

Rental Home Policies

The purpose of a rental home policy is to cover damages that may occur to the structure of a dwelling. This will include the foundation, framing, internal wiring, piping and other aspects that make up the structure of a home. In some cases, you should be able to reduce the cost of your rental property policy. This can be done by including a clause in your lease that requires your renters to purchase coverage so that the value of their personal belongings is covered if damages were to occur.

Making A Transfer To A New Policy

Your homeowner’s insurance policy will likely have a clause that terminates coverage if you decide to turn your home into rental property. It’s important to change your homeowner’s policy over to the rental property before any new renters move in. If you don’t, the home will not be covered at all. If serious damage were to occur, you would have to foot the bill, which could end up costing you thousands of dollars.