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I Want to Rent Out My Home. What Do I Need to Do?

Renting is on the rise. Thanks to a strong housing market, many homeowners are deciding to rent out their old homes rather than sell them. If you fall into that camp, you’ll want to talk to your insurance agent about changing your current homeowners insurance policy to a rental policy.

Your insurance

 A rental policy is a little different than a typical homeowners policy, since it’s set up to cover the unique arrangement of someone else living in a structure that you own. Typically, it includes these three types of coverage: 

  • Physical damage coverage for damage to the building itself (like a lightning strike or fire)
  • Personal property coverage for your belongings you leave on-site for maintenance or tenant use (like a lawnmower or washer/dryer)
  • Liability coverage for legal fees if a tenant or guest gets injured on the property

Another important benefit of a rental policy is fair rental value. In the event that your home suffers a loss that is covered and your tenant can’t live in your unit until repairs are made, ERIE can provide up to 12 months of fair rental value. This means you won't lose out on the rental income you may rely on each month. And, if you need more than 12 months, ERIE offers an endorsement that gives you up to 24 months of this coverage.

A rental policy is important for landlords, and you’ll want to get one in place before your first tenant moves in.

Your tenant’s insurance

Once you get a tenant, it’s a good idea to talk to him or her about a renters insurance policy. A renters insurance policy will protect the possessions your renter brings with them—and it can offer you important protection if you’re listed as an additional insured.

When you ask your renter to list you as an additional insured, the liability protection from their policy can be extended to you if something unfortunate happened. For example, imagine your tenant burns a candle, and it causes fire damage in your home. As an additional insured on their policy, you would know that their liability coverage could respond to repair the damage.

You can also benefit from the liability protection in their policy. Imagine your tenant’s dog bites someone. The victim could seek reimbursement from your tenant’s policy rather than yours. 

Finally, being an additional insured also entitles you to be notified if the policy is cancelled or is modified. For these reasons, you may want to insert wording into the lease about a tenant having a specific amount of insurance.

You can let your tenant know that renters insurance also benefits them in many ways—and it’s very affordable. In fact, sometimes the discount a tenant receives from buying a renters policy from the same company from which they buy their auto policy is enough to cover the renters policy premium.

What about Airbnb or short-term rentals?

With the growth of rental sites like Airbnb, many homeowners are cashing in on welcoming short-term rental guests. That could mean subletting a single room, renting out your home while you’re on vacation, or listing a full-time rental property on a vacation rental website.

However you’re renting it out, you’ll want to talk to an insurance professional like an ERIE agent about what your listing site’s insurance could cover, and where your own insurance would kick in.

Good news: With ERIE, you have options to customize your existing coverage for home sharing – depending on what you’re renting, and for how long.

  • To rent out your primary home: If you want to rent out your own residence –whether it’s your whole home or just a spare bedroom – ask about adding the new home sharing endorsement* to your ErieSecure homeowners policy. This is designed for people renting their homes fewer than 180 consecutive days per year. It’s affordable, too – the average cost is about $40 to $60 per year.
  • To rent out a rental property: If you own a property exclusively used for renters or tenants (like an apartment building or cottage), an ErieSecure Rental or Ultrapack Plus policy has built-in coverage for home sharing. You’re covered to host short-term tenants, as long your place is listed on a reputable website that offers liability coverage equal to $1,000,000 or greater for bodily injury to or property damages of guests. 

Get trusted advice

Becoming a first-time landlord is exciting—and probably also a little overwhelming. That’s why many people seek out help from an insurance professional like a local Erie Insurance agent. He or she can answer all your questions and make sure the right coverage is in place every step of the way.

Find an ERIE agent in your area to help you get covered. *Not available in Virginia or North Carolina

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of July 2022 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.