Builders Risk Policy — property insurance that is designed to cover property in the course of construction. There is no single standard builders risk form; most builders risk policies are written on inland marine (rather than commercial property) forms. Coverage is usually written on an all risks basis and typically applies not only to property at the construction site, but also to property at off-site storage locations and in transit. Builders risk insurance can be written on either a completed value or a reporting form basis; in either case, the estimated completed value of the project is used as the limit of insurance. Most policies will cover.

• Fire

• Lightning

• Windstorm

• Hail

• Explosions

• Theft

• Vandalism

Dwelling

Rental property insurance, also called landlord insurance, covers the unique risks taken in renting out your home or condo for long periods of time. Its coverage includes property damage, liability costs and loss of rental income for landlords renting their property. Whether you are renting your house, a vacation home or an investment property, rental property insurance is an important safeguard against the financial risk associated with tenants living on your property.

• What Does Rental Property Insurance Cover?

What Does Rental Property Insurance Cover?

Rental property insurance coverage will vary, but policies will generally cover the dwelling or structure of your property, contents of the property belonging to the landlord, liability coverage and loss of rental income. Much of its coverage is similar to that of homeowners insurance, though it has unique features that homeowners insurance lacks and which account for the added risk of having tenants on your property.ka

Rental Property aka Dwelling aka Fire Policy

Rental property insurance covers physical damage to your dwelling, Coverage will only extend to damage caused by a covered perils and you should make sure to understand what type of perils. Basic Broad and Special Coverages. Liability can be extended to rental property in various ways and is often an overlooked coverage.

Coverage For the Landlord's Personal Property

Rental property insurance will often include coverage for items left onsite by the landlord. For example, if you left a lawnmower at your rental house and it is damaged by a fire—and fire is a covered peril in your policy—damage to the machine would be covered by your rental property insurance. On the

Liability Coverage

Liability coverage will protect you from from the legal and medical costs associated with someone being injured on your rental property. If your tenant or a visitor is injured on your property, and you are deemed responsible for the injury, rental property insurance can cover these costs up to your policy limits. If you're someone for whom the limits of this coverage are not sufficient to cover potential liabilities and you wish to increase your coverage, you could also purchase umbrella insurance for your rental property.

Loss of Rent Coverage

This coverage provides protection against lost rent payments if the property you rent is uninhabitable due to a covered peril. You can think of it as a form of rent guarantee insurance. For example, if fires are covered under your rental property insurance, and fire damage makes your apartment uninhabitable, rental income protection covers you for the rental payments your tenants are no longer obligated to pay. Coverage will generally extend up to a defined period of time, such as 12 months. Loss of rental income does not always come standard with rental property insurance, so you should check your policy before purchasing it if this type of coverage is important to you.

Types of Rental Property Insurance Policies

When you're shopping for rental property insurance policies, you may notice that there are different types of policies called "forms." Similarly to homeowners insurance, differing rental property insurance forms have different levels of coverage. The descriptions provided below are generalized, but they can give you an idea of what to expect for each type of form.

DP-1: Rental property insurance is categorized as a Dwelling Policy, or DP, and the DP-1 is the cheapest form with the most basic coverage. DP-1 forms usually only cover named perils, meaning that if a peril, or disaster, is not explicitly named in the form you will not be reimbursed for damage. These policies often reimburse you on an actual cash value basis, meaning that your insurer will pay you for covered damage minus wear and tear, called depreciation.

DP-2: This form provides slightly broader coverage than the DP-1. Like the DP-1, DP-2 coverage tends to be on a named peril basis. However, DP-2 coverage will generally extend to a broader range of perils. For example, an insurer might offer coverage for burglary damage in its DP-2 policy but not in its DP-1. The DP-2 form also improves over the DP-1 by typically providing coverage on a replacement cost basis, meaning that damage will be covered at the price it would take to cover the damage at current market prices, without accounting for depreciation.

DP-3: This form, the most expensive, provides the broadest range of coverage of the three. This type of policy will provide extensive peril coverage, protecting against all perils except those explicitly excluded in the policy. Like the DP-2 policy, its coverage will be provided on a replacement cost basis.

Optional Additions to Your Rental Property Insurance

The coverage provided by rental property insurance will vary by insurer, and coverage that is standard with one insurer may be optional or unavailable with another. Below we've listed a few examples of common endorsements you may be able to add to your rental property insurance. We recommend shopping for quotes to find the best combination of price and coverage that fits your needs.

Optional rental property insurance endorsements

• Vandalism coverage: This usually covers deliberate physical damage to the home. Allstate is an example of an insurer that does not cover vandalism with its rental house insurance but offers it as an endorsement.

• Ordinance or law coverage: This covers a loss of value or costs associated with enforcing local laws surrounding the repair of property caused by an insured loss. If this type of add-on is important to you, you could look to State Farm, which which offers this endorsement.

Do You Need Rental Property Insurance If You Have Homeowners Insurance?

It depends on how long you intend to lease the property, but in most cases homeowners insurance coverage won't be an appropriate substitute for rental property insurance. The presence of tenants in a rental property engenders unique risks that won't be covered by homeowners insurance, particularly if you plan to lease a property for an extended period of time. The type of insurance you need will depend on how often you rent out your home and the duration of your tenants' stays. These distinctions can be divided into three categories: Long-term renting, infrequent short-term renting and frequent short-term renting.

Long-term renting: If you have an investment property, vacation home or second home which you intend to rent to a single person, couple or family for long periods of time you will need to purchase rental property insurance. Long periods of time would generally be defined as six months or longer. The same is true if you are renting your primary residence for a large chunk of the year. Compared to being a live-in homeowner, having a rental house increases your exposure to certain risks, such as liability issues relating to tenants and their guests, and your insurer won't cover these risks under a homeowners policy unless you are actually residing in your home.

Infrequent short-term renting: If you only intend to rent out your property for a short period of time, such as a week or for a few weekends, your homeowners insurance may indeed cover the risk to renting your home. This coverage may come standard in your policy if you give appropriate notice to your insurer, extending the usual benefits of homeowners insurance to periods in which you are temporarily renting your property. It it doesn't come standard, you may be able to buy an endorsement from your insurer that extends your coverage to temporary rentals. Before you commit to short-term renting, you should contact your insurer to make sure it is notified and that you understand your coverage.

Frequent short-term renting: If you're planning to rent out a property regularly to a variety of people for short periods of time, your property may be considered a business, and neither homeowners insurance nor rental property insurance will cover you. Instead, you will need to purchase some form of commercial property insurance to cover the associated risks. For example, Progressive provides homeshare insurance, also called vacation rental insurance, for people who rent out their home or rooms through a service provider such as Airbnb or VRBO.

How Much Does Rental Property Insurance Cost?

Rental property insurance is approximately 25% more expensive than an equivalent homeowners insurance policy. Given that the nationwide average cost of homeowners insurance is $1,083, you can expect the nationwide average for rental property insurance to be approximately $1,350. The higher rates reflect additional risks posed to a landlord over a live-in homeowner, such as the potential loss of rental income and the injury liability posed by tenants and their guests. If you're interested in rental property insurance, policies are offered by major homeowners insurance companies such as Allstate and State Farm so you can easily shop for and compare rental property insurance quotes online.

What Is Homeowners Insurance?

Homeowners insurance is a form of property insurance that covers losses and damages to an individual's residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.

KEY TAKEAWAYS

• Homeowners insurance is a form of property insurance that covers losses and damages to an individual's house and assets in the home.

• The policy usually covers interior damage, exterior damage, loss or damage of personal assets, and injury that arises while on the property.

• Every homeowners insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur.

• Homeowners insurance should not be confused with a home warranty or with mortgage insurance.

Understanding Homeowners Insurance

A homeowners insurance policy usually covers four kinds of incidents on the insured property—interior damage, exterior damage, loss or damage of personal assets/belongings, and injury that occurs while on the property—. When a claim is made on any of these incidents, the homeowner will be required to pay a deductible, which in effect is the out-of-pocket costs for the insured.

For example, say a claim is made to an insurer for interior water damage that has occurred in a home. The cost to bring the property back to livable conditions is estimated by a claims adjuster to be $10,000. If the claim is approved, the homeowner is informed of the amount of his or her deductible, say $4,000, according to the policy agreement entered into. The insurance company will issue a payment of the excess cost, in this case, $6,000. The higher the deductible on an insurance contract, the lower the monthly or annual premium on a homeowners insurance policy.

Every homeowners insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur. The standard limits are usually set at $100,000, but the policyholder can opt for a higher limit. In the event that a claim is made, the liability limit stipulates the percentage of the coverage amount that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is worked on.

Acts of war or acts of God such as earthquakes or floods are typically excluded from standard homeowners insurance policies. A homeowner who lives in an area prone to these natural disasters may need to get special coverage to insure his or her property from floods or earthquakes. However, most basic homeowners insurance policies cover events like hurricanes and tornadoes.

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Home Insurance

Homeowners Insurance and Mortgages

When applying for a mortgage, the homeowner usually is required to provide proof of insurance on the property before the financial institution will loan any funds. The property insurance can be acquired separately or by the lending bank. Homeowners who prefer to get their own insurance policy can compare multiple offers and pick the plan that works best for their needs. If the homeowner does not have their property covered from loss or damages, the bank may obtain one for them at an extra cost.

Payments made toward a homeowners insurance policy are usually included in the monthly payments of the homeowner’s mortgage. The lending bank that receives the payment allocates the portion for insurance coverage to an escrow account. Once the insurance bill comes due, the amount owed is settled from this escrow account.

Homeowners Insurance vs. Home Warranty

While the terms sound similar, homeowners insurance is different from a home warranty. A home warranty is a contract taken out that provides for repairs or replacements of home systems and appliances such as ovens, water heaters, washers/dryers, and pools. These contracts usually expire after a certain time period, usually 12 months, and are not mandatory for a homeowner to buy in order to qualify for a mortgage. A home warranty covers issues and problems that result from poor maintenance or inevitable wear-and-tear on items—situations in which homeowners insurance doesn't apply.

Homeowners Insurance vs. Mortgage Insurance

A homeowners insurance policy also differs from mortgage insurance. Mortgage insurance is typically required by the bank or mortgage company for homebuyers making a down payment of less than 20% of the cost of the property; the Federal Home Administration also requires it of those taking out an FHA loan. It's an extra fee that can be figured into the regular mortgage payments, or be a lump sum charged when the mortgage is issued.