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Do I Have the Right Homeowner’s Insurance for My Los Angeles Rental Property?

We all know we need homeowners insurance for our property but if you are an “accidental or unintended landlord”, meaning you moved and decided to rent your home or you are just new at being a landlord, you may be unfamiliar with the different types of policies available to you.

True or False – Your homeowners insurance company can deny coverage for a loss at your home if it is now a rental property.

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Answer: TRUE

Make it a priority to look over your homeowners insurance policy because it’s very likely your existing policy doesn’t cut it anymore. Most policies cover owner-occupied homes, and yours no longer qualifies. What does this mean? It means, the insurance company can deny coverage unless you have the proper policy. Of course there are various policies to choose from that cover standard losses in addition to equipment breakdown, loss of rental income, and accident liability so make sure to discuss your options with your insurance professional. Taking action now will ensure that your rental is properly covered.

One other word of advice: Make sure your tenants have renters insurance to cover their own personal liabilities and personal property.  

Nearly 72% of householders under age 30 live in rental housing, according to the National Multihousing Council. Yet many people have either never heard of renter’s insurance or ignore it. According to a 2014 survey by the Insurance Information Institute, 95 percent of homeowners had homeowner’s insurance but only 37 percent of renters had renter’s insurance.
You may think, building problems may make your life uncomfortable but the repair bill ultimately goes to the landlord. In fact, while your landlord’s insurance covers damage to the building, it doesn’t cover your belongings.  Even if you don’t think your possessions are valuable, imagine the implications of losing and having to replace everything you own. “You try to replace your bed, mattress, comforter, sheets, pillow—we’re talking a lot of money here,” says Jeanne Salvatore, senior vice president of the Insurance Information Institute. “If you have to re-buy everything, it’s going to cost thousands, even for the most bare-bones apartment.”
Renter’s insurance provides financial protection against the loss or destruction of possessions from fire or smoke, vandalism, theft, explosion, windstorm and water damage (not including floods). If the individual is unable to live in his or her apartment, the policy also covers the cost of living in a comparable apartment for a certain amount of time.
Property owner’s cannot and will not cover hotel stays, displacements, or damage to belongings. They are not required to by law nor will their insurance cover it. Therefore, it is very important that as a renter to purchase renter’s insurance in order to cover your belongings, personal liability, and displacement.  Some renters insurances will even cover renter’s negligence (i.e. not reporting a leak and it causes $5000 in damages). If you think you can’t afford it, please think again. The average annual premium is less than $120 or $10.00 a month.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.