We are planning to purchase another home and keep our current home as a rental property. Do we need to change our homewoner policy on the property we are going to rent? Janet and Cade P., St.Louis Missouri

Janet and Cade,

A common question and a very good one.  Yes, by all means you will need to change the homeowners policy once your property becomes a rental property. The policy will differ from your current policy in 3 major ways:

1-The new policy will not cover contents coverage unless you are planning on furnishing the unit for your tenants

2- Liability issues will be more of a concern to protect you from injuries/accidents that occur on your property

3- You will need to be protected from the loss of rental income in the event your tenants are forced to leave because the home is damaged due to a covered peril

Fortunately, there are rental policies that are designed for this very purpose. These policies can vary greatly from each other depending on the company that you are working with. Some thing to consider when shopping for a home insurance quote:

• Make sure that the policy has substantial coverage for Liability and Medical Payment to cover your responsibility for accidents and injuries that occur on your property.
• Look for a policy that covers loss of use which will reimburse you for loss of rental income in the event that the home must be evacuated due to a covered peril
• If you are leaving any appliances or other personal property on the premises be sure to carry enough contents insurance to cover the loss of these items.  However, you do not need to carry the standard amount of contents insurance which would cover furniture, furnishings, etc, if you are not furnishing your home.  Your renters should get renters insurance to cover their items.
• Do you have detached garages or sheds? be sure to discuss coverage of these items with your agent
• Make sure to have dwelling coverage which will cover the structure of your home in the event of a covered peril

Thanks,

Your Agent@HomeInsurance.com