Landlord Insurance vs. Homeowners Insurance: Why Occupancy Matters
If you’re turning a home into a rental—even part-time—your insurance needs change. A standard homeowners policy is built for owner-occupied homes. Once tenants move in, the risks (and responsibilities) shift, and that’s where landlord insurance (often called dwelling fire policy) comes in.
The core difference: who lives there
Homeowners Insurance: You live in the home. Coverage typically includes the structure, your personal belongings, additional living expenses if you’re displaced after a covered loss, and personal liability.
Landlord Insurance: A tenant lives there. Coverage focuses on the structure, landlord liability, your limited landlord-provided contents (e.g., appliances), and often loss of rental income after a covered claim.
Think of it this way: occupancy drives risk, and risk drives the policy you need.
What landlord insurance usually adds (that homeowners insurance doesn’t)
Loss of Rental Income: If a covered loss (like a fire) makes the unit uninhabitable, this can reimburse the rent you would’ve collected during repairs. Homeowners insurance treats rent as a business exposure—typically not covered.
Landlord Liability: If a tenant or guest is injured and alleges it’s due to your negligence (loose handrail, icy steps, faulty smoke detector), landlord liability can help with legal defense and settlements.
Limited Landlord Personal Property: Coverage for items you provide and own (stove, fridge, sometimes window coverings). Tenants’ belongings aren’t covered—they need their own renters insurance.
Pro tip: Many landlords require tenants to carry renters insurance and list the landlord or property manager as an interested party for notice of cancellation. This way, any tenant-caused damage would go through the tenant’s renters insurance first, and you’d be notified if their policy is canceled.
Do you need landlord insurance?
If anyone other than you lives there, most carriers treat it as a tenant-occupied risk and you’ll likely need a landlord policy.
Typical scenarios
Long-term rental: Single-family home or condo leased to a tenant. → Landlord policy + require renters insurance.
House hack: You move out and rent the whole property. → Convert to landlord policy (tell your carrier and/or agent).
Short-term rental (Airbnb/VRBO): Rules vary. You’ll likely need a specialized STR policy, or a commercial policy. Standard homeowners or rental property policies often exclude short-term rental activity without proper endorsements.
Vacancy between tenants: Many policies limit or exclude coverage after a certain number of vacant days (often 30–60). Ask about specific vacancy conditions.
The bottom line
If it’s owner-occupied, you want homeowners insurance. If it’s tenant-occupied (or used for short-term rental), you need landlord coverage tailored to how the property is actually used. Getting occupancy right protects your investment—and avoids ugly surprises at claim time.
