If you’re thinking of buying or leasing rental property in Austin, you’ll need to decide if you need homeowners insurance or landlord insurance to protect your investment. In this article, we’ll examine the differences between homeowners and landlord insurance. Let’s get started with two questions:

1) Are you temporarily renting out your home for something like a big sporting event or convention?

2) Or, is your rental property a full-time rental with a long-term lease agreement?

The answers to these two questions represent a fork in the road, and they principally answer the question, “do I need homeowners insurance or landlord insurance for my rental property?“.

Insurance for Short-Term Rentals

If your situation involves a short-term rental for an event like SXSW or a car race at Circuit of the Americas, your existing homeowners insurance policy may provide some protection, according to the Insurance Information Institute. This type of policy typically covers things like fire or a break-in; however, there may be restrictions on purchasing this type of policy if you don’t physically live in the home.

What If I Rent Out a Room?

If you live in your home and also rent out a room, you may be covered by homeowners insurance. It largely depends on the number of people renting from you, along with the length of time they remain in your home.

A local insurance agent can best advise you on your particular situation, and if you need a recommendation, please reach out to TALK Property Management anytime; we’re happy to provide names of those we trust.

Insurance for Full-Time Rentals

Similar to homeowners insurance, landlord insurance often helps cover the structure itself (along with other buildings on the property like sheds or fences) in the event of damage from a fire, lightning, wind, hail, or other covered areas.

While homeowners insurance often covers certain belongings that are in your home, landlord insurance usually only includes items that are used to help maintain the rental property, such as a lawnmower.

Landlord insurance typically provides liability coverage as it relates to the rented premises. In other words, if a tenant is injured in your rental property and you’re deemed to be legally responsible, the liability coverage from your landlord policy may assist with the resulting medical expenses or legal fees.

Your tenant is responsible for insuring their personal possessions, and it’s prudent to require renter’s insurance as a condition of your lease. Renter’s insurance helps protect your tenants’ belongings, in addition to providing some liability protection.

Do you have more questions about the difference between homeowners insurance and landlord insurance or how they relate to your Austin rental properties and tenants? Reach out to TALK Property Management anytime; we’re always happy to help.