There are several types of insurance covers that you will need to have in place before renting out your property in the USA. The most important products you are likely to encounter are homeowners insurance and landlords insurance.
There is sometimes confusion
between these two insurance products, yet the
distinction is quite straightforward. You are required to purchase
homeowners insurance if you are living in the property and landlords
insurance if you are renting it out to tenants.
The chances are you will have taken out homeowners insurance at the
point of sale. However, when the time comes to rent out your property you will
need to change policies as receive far more protection from a
landlords policy. This includes liability against your tenants suffering an accident on the property as well as protection against damage to the property and potential loss of rent in the event that a tenant leaves or is unable to pay.
You should have a landlords policy in place, regardless of whether your property is a single family
home or a condo. Many property investors make the mistake of assuming insurance isn't
necessary if their condo is tied to a homeowners association. While your HOA fees may include basic insurance coverage for the building, this is unlikely to include protection against damage to the interior of your home or its contents.
Tenants insurance and contents insurance are specific policies which can be bought separately, though these are usually included under any premier landlords policy. Many
landlords with multiple properties form or join a Limited
Liability Company or LLC. Transferring the deeds of the property from one's own name to an LLC is fairly inexpensive, usually costing $99. Doing this mean you cannot be sued personally should something go awry.
Your property management company should be able to advise you on the insurances you should have in place as a landlord and how to go about arranging these.