First rental property! Any additional insurance needed?

Question

I own a condominium in the Olde Kensington neighborhood of Philadelphia, PA. The insurance policy I have on it is the HO6 policy. This will be my first rental and want to make sure I've got all of my insurance in place. The tenants will obtain their own renter's insurance. Is there any extra insurance I need in addition to my HO6 policy when it is rented?

Greg Schuricht · Answer

I carried an HO6 policy for quite awhile in error on my one property.  I wasn't too worried about it because I was renting to family at the time.  But I inquired with an insurance agent who said I needed a business owners policy (BOP) and he promptly sold me one.  I'm by no means an expert on insurance coverage, but that was my experience.

John Mocker · Answer

Jason is correct that the vast majority of Insurance companies will not insure a rented condo with a Homeowners form.  There are a couple of companies however that will do a rented condo under an Ho6 form but they are few.   If your agent says that your policy is ok for the rented situation get that in writing.

Make sure you are getting equivilant coverage for the Improvements & Betterments (I&B's - parts of the building that you own).  Some policies will not cover "Special Form" for I&B's.  The other area that you need to think about is how much contents coverage to buy.  On the H06 form you have built-in coverage.  The Dwelling Fire form used for rented dwellings either does not automatically include it or has a very low limit.  Think about the non-permanant items (fridge, stove, furniture, etc.) that you are supplying and make sure the limit is enough to replace it.

Jason Bott · Answer

Sean, "HO" of HO6 stands for "HomeOwner".   The insurance definition for "Homeowner" is the owner of the property is living at that property as their primary residence.  If you are not residing there, a Homeowners policy is the wrong policy for your situation.

Contact your agent and asked if you need to change your policy to a "Non-owner occupied dwelling" or "Rental Dwelling"

John Underwood · Answer

@Sean Buruschkin

Sounds like you have it covered. Maybe an umbrella policy if you really want another layer of protection.