Purchasing properties and renting them out has become a cornerstone in many people’s financial portfolios. These properties, because they are not owner occupied, do not qualify to be written on a regular homeowners policy. The insurance company recognizes that owners still need coverage to protect against certain losses and offers dwelling insurance to satisfy this need. Dwelling insurance is used to cover dwellings that are not owner occupied or do not otherwise qualify for homeowners insurance. Personal liability and personal property coverage is not standard on a dwelling fire policy but can be added by endorsement. Endorsements change or modify the original policy and are listed on the policy declarations page.
Dwelling insurance provides coverage for non-owner-occupied property such as rental houses or apartments. Unlike homeowners insurance, many companies will allow you to insure multiple properties on one dwelling fire policy, simplifying the billing process. Dwelling insurance does not automatically provide coverage for personal liability and personal property. Also, many companies write dwelling fire policies on a basic form which provides limited dwelling protection.
Basic dwelling protection provides coverage for fire, lightning and internal explosion. Other coverages can be added by endorsement. Broad dwelling protection provides coverage against a larger spectrum of perils, including those covered in the basic dwelling policy plus windstorm, explosion, damage caused by burglary, accident discharge or overflow or water and collapse. Special dwelling coverage provides coverage for anything that is not specifically excluded in the policy.
The premium for dwelling insurance varies greatly. Sometimes it is more expensive than homeowners insurance because the building is not owner occupied and the insurance company fears the damage renters or others may cause. On the other hand, because dwelling insurance does not provide as much coverage as a homeowners policy, the premium can sometimes be less. Discuss your options with an insurance agent before deciding on a policy.
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