Landlord insurance vs. homeowners insurance: what changes when you rent the house out
Nothing about the house changes. The policy still renews. But the contract you have describes an owner-occupied home, and the moment someone else has the keys, it describes a house that no longer exists.
The short answer
A homeowners policy is written for a house you live in. A landlord policy — often called a dwelling fire or DP policy — is written for one you rent out. The building coverage looks similar. What changes is liability, contents, and what happens to the rent while the place is being repaired.
Three practical differences matter. Your contents coverage shrinks to what you actually own there, usually just appliances. Your liability is now landlord liability. And loss of use is replaced by loss of rents, which pays the income the property was producing.
The risk of not switching is not that the premium is wrong. It is that at claim time the carrier looks at a policy for an owner-occupied home, finds a tenant living there, and denies it. Nothing about the house has to change for this to happen.
Washington State Legislature — RCW 59.18.060(13)
Own book of business — Anel Galicia Insurance
U.S. Department of the Treasury, Federal Insurance Office — Homeowners insurance costs rising
No social security number needed. Just a name, an address and a date of birth.
What actually changes when a tenant moves in
Less than you would expect on the building, more than you would expect everywhere else. The structure is still a structure and fire is still fire. What changes is that the person living there has no stake in maintaining it, no contents of yours to protect, and a lease that creates obligations a homeowner never has.
| Coverage | On a homeowners policy | On a landlord policy |
|---|---|---|
| The building | Covered | Covered — broadly similar |
| Your belongings inside | Everything you own in the house | Only what you own there: appliances, a lawnmower, furniture if it is furnished |
| Tenant's belongings | Not applicable | Never covered — that is the tenant's renters policy |
| Liability | Personal liability as a resident | Landlord liability — injuries to tenants and their guests, habitability claims |
| Income if the house is unlivable | Loss of use: pays for you to live somewhere else | Loss of rents: pays the rent you are no longer collecting |
| Vacancy | Not usually an issue | Long vacancies can restrict coverage — tell your carrier |
Why the denial risk is the real cost
A carrier prices an owner-occupied home partly on the assumption that an owner is there noticing problems. When a claim reveals a tenant instead, the carrier is looking at a risk it never agreed to insure. The premium difference is small; the denial is not.
Loss of rents is the line landlords underrate
On a homeowners policy, loss of use pays for you to stay somewhere while your house is repaired. On a landlord policy the equivalent pays you the rent that stopped arriving. If the mortgage on that property is serviced by the rent, this coverage is what stands between a kitchen fire and a missed payment.
How to size it
Think in months, not dollars. A fire that needs a permit and a contractor is not a three-week repair in most Washington markets. Ask what limit corresponds to six months and to twelve, then decide which one you could survive without.
Your tenant's belongings are not yours to insure
This is the single most common misunderstanding on both sides of a lease. Your policy covers the building you own. The tenant's furniture, electronics and clothes are theirs, and if a pipe bursts and ruins all of it, your policy does not replace it — their renters policy does.
Why requiring renters insurance protects you, not just them
An uninsured tenant who loses everything has one place to look for compensation, and it is you. A tenant with a renters policy has liability coverage of their own, which means a kitchen fire they caused gets handled between two carriers instead of becoming a dispute with you.
What it costs them
Very little. Our renters clients pay about $15 a month, and that number does not change by city or ZIP code anywhere in Washington. Our renters insurance page is a reasonable thing to hand a new tenant along with the lease.
◆ We answer the same dayTurning a home into a rental?Tell us the address and whether it is a long-term lease, a room, or short-term. We will tell you which policy it actually needs.Message us on WhatsAppOffices in Tacoma and Auburn · Serving all of Washington · English and Spanish
What Washington law will require you to tell your tenant
Starting in 2027, Washington landlords have to state in writing that their own insurance does not cover a tenant's personal property, under RCW 59.18.060. It is a small disclosure with a useful side effect: it forces the conversation about renters insurance at lease signing instead of after a loss.
The practical way to handle it
Put the disclosure and the renters insurance requirement in the same paragraph of the lease. You satisfy the statute, the tenant learns something genuinely useful, and you remove the most common source of a dispute you would otherwise be arguing about without a policy behind you.
The accidental landlord
Most landlords we write did not set out to be landlords. They bought a second home, or inherited one, or moved for work and could not face selling. The house is the same house and the policy renews on its own, which is exactly why the coverage gap goes unnoticed for years.
The three moments to call your agent
- Before the tenant signs, not after they move in.
- When the property sits vacant between tenants for more than a month or two — long vacancies can restrict coverage.
- When you switch from long-term to short-term renting, which is a different risk and often a different policy entirely.
If the property is financed
Your lender is named on the landlord policy the same way it was on the homeowners one, and if there is an escrow account the premium still runs through it. The mechanics are in how escrow pays your insurance, and if you are buying the rental now, the lender still needs a binder before funding.
What we need to quote it
The address, how it is rented — long-term lease, room, or short-term — and roughly what the monthly rent is, because that is what sizes the loss of rents limit. If you have the current homeowners declarations page, send that too so we can match coverage rather than guess at it.
Why six carriers matters on rentals
Appetite for rental property varies more between carriers than almost any other risk. One will decline a property another prices normally, and non-renewals are running about 80% higher in the highest climate-risk ZIP codes than in the lowest. Having six to ask is the difference between a quote and a problem.
Where to start
Send the details through a free quote, or read what the homeowners policy covers if you want to compare the two side by side. We are in Tacoma and Auburn and write across Washington — here is who we are.
Frequently asked questions
Do I really have to change my policy if I rent out my house?
Yes. A homeowners policy is written for an owner-occupied home, and renting it out changes the risk the carrier agreed to take. Leaving it in place is not a clever saving — it is the reason a claim gets denied after the fact.
What if I only rent it out for part of the year?
Tell your carrier. Short-term and seasonal rentals have their own endorsements and sometimes their own policies, and the rules differ sharply between a room in the house you live in and a whole home you do not. This is a question with a real answer, not a grey area.
Does my landlord policy cover my tenant's furniture?
No, and it never will. Your policy covers the building, your liability as the owner, and the appliances you own. Everything the tenant brought in is theirs to insure, which is what a renters policy is for.
Can I require my tenant to carry renters insurance?
In Washington you can make it a term of the lease, and most landlords managing more than one unit do. It is inexpensive enough that it rarely becomes a negotiating point, and it keeps small tenant losses from turning into claims against you.
What is loss of rents coverage and do I need it?
It replaces the rent you would have collected while the unit is uninhabitable after a covered loss. If the mortgage on that property depends on the rent arriving, this is not optional coverage — it is the line that keeps a fire from becoming a foreclosure.
I moved out and kept my old house. Is that a landlord policy?
The moment a tenant moves in, yes. This is the most common version of the problem, because nothing about the house changed and the policy renews quietly in the background. Call before the tenant signs, not after.
Keep reading
Sources
- Washington State Legislature — RCW 59.18.060, subsection (13) (landlord's written notice that their insurance does not cover tenant belongings).
- Washington State Office of the Insurance Commissioner — Consumer insurance glossary.
- U.S. Department of the Treasury, Federal Insurance Office — Homeowners insurance costs rising, availability declining.
- Northwest Justice Project — Tenants' rights while you are renting.
This article is general information about insurance in the state of Washington. It is not legal advice and it is not an offer of coverage. Whether a policy covers a given loss depends on its own wording, its endorsements and its exclusions; read yours, or send it to us and we will read it with you. Anel Galicia is a licensed insurance producer in the state of Washington.