If you rent out all or a portion of your home, there are more specialized policies designed to deal with the different set of risks and perils associated with these types of dwellings. As a homeowner, you still want to make sure you purchase enough coverage to rebuild your home in the event of a total loss. But homes that are completely or partially rented out also usually represent an investment to the owner as well, and you want to make sure that you protect that investment. Rented dwelling policies can include coverage for lost rental income due to an insurable risk.
Rented dwellings do represent a higher risk as they have more frequent claims than homeowners’ policies. Therefore the coverage is often more limited than a standard homeowners policy. The owner also bears part of the responsibility with regard to which tenants they allow into their home. A landlord that selects their tenants carefully has fewer losses and problems later on.