On Becoming a Landlord—Insurance for Your Charlotte NC Rental
Are you about to become an unintentional landlord?
Perhaps you need to move from your existing home for a new job. Or there’s not enough room for the new baby. Maybe your mother-in-law is coming to live with you.
But you have one tiny problem. Market prices have fallen since you purchased and you’re underwater on your mortgage. You decide that renting the home while the market recovers is your best option. You are going to join the many Charlotte NC home owners who have become landlords.
Here are some tips about how to design your homeowners insurance when your primary residence turns into a rental.
- You will need to convert your existing homeowners policy into a Dwelling Fire Insurance Policy. Why? A Dwelling Fire Insurance Policy is the only way to get liability coverage for a rental property. If someone gets hurt at your rental, you want to have liability coverage.
- You will want to require your renter to get a Renters Policy. This will cover the tenant’s personal property and liability.
- The tenant needs to list you as an “Additional Interest” on the Renters Policy. This will ensure that you are notified is the Renters Policy is cancelled. A guest who gets hurt and sues will get payment for damages from the Renters Policy rather than from you, the property owner.
Want to know if you may become an unintentional landlord? Request a free opinion of value of your Charlotte NC home.
Copyright 2011. Carol Fox. Allen Tate Realtors *On Becoming a Landlord—Insurance for Your Charlotte NC Rental*
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In my property management presentation, I caution homeowners to call their insurance agent ASAP when they know their moving date and convert their homeowner policy AND put landlord liability coverage on the policy.....a minimum $1,000,000 - it's pennies and TAX DEDUCTIBLE!
Thanks, Wallace, for the tip. There are so many new landlords and so many things to think of.
Carol,
Fantastic information for those who are unintentionally becoming landlords. The right insurance covereage is key.
All the best, Michelle