I was talking to a client today about his new Landlord Policy. He had recently purchased a new house and converted his Condo to a Rental Property. He wanted to know why the Landlord Policy was more expensive than his Condo H06 Policy.
I explained to him there are many reasons why the Landlord, or Dwelling Fire Policy, is more expensive.
1) Renters will come and go; some will be respectful, some may not. The insurance company has vetted the homeowner and knows they will reside in the house and maintain and take good care of it. The Insurance company doesn't know who will be there.
2) If you find a water leak, you will probably take care of it right away; a tenant may not want to bother you and not say anything until mold starts to show and floors start to buckle.
My insured then asked, " I require my tenant to have Renters Insurance, won't that protect my house?"
I explained that the Renters policy covers the Tenant's Liability and Personal Property, not the structure. The renter does not have an INSURABLE INTEREST in the property. You can not insure what you do not own.
However, if the Tenant is negligent and causes damage, the landlord can certainly go after the Tenant through a Liability claim, but that may take a while to settle. Use your insurance to cover the loss and the file on the renter's policy.