If I run a paying guest house,in Albertville, Minnesota, is it better to have home or commercial insurance?

If you decide to become a landlord and rent out your Albertville, Minnesota home to paying tenants, your regular home insurance policy will most likely not cover you against the risks of owning a home. A typical home insurance policy is usually written to cover an owner-occupied, single family home. Once you change the status or use of your house to a guest house with regular paying guests, you will need to get commercial or landlord insurance.

Commercial real estate insurance is really designed for property owners who rent out warehouses, offices and other commercial properties. Landlord insurance is the right kind of insurance to have in Albertville, whether you have a single family house, a duplex, or a small building with multiple apartments.

The reason why you need to call your independent agent and let them know that you are turning your home into a guest house is that you need to change your coverage to be protected against the increased risk that comes with renting to paying tenants or guests.

Typically, the costs of a landlord insurance policy are about 20 percent higher for the same amount of coverage as if you were the owner and occupant of the premises and used a standard home insurance police to protect yourself from perils and liability.

Insurance industry statistics show that there is a higher incidence of claims associated with operating a pay guest house than simply buying and living in a home that you own. Tenants do not have the same pride of ownership and do not take good care of the house or room that they are renting. There is also the increased liability that you incur when other people live on your property.

As your independent agent, we would suggest that you make sure you have a commercial or landlord insurance policy in place before you ever start taking in paying tenants. It is also a good idea to carefully screen applicants and make sure you obtain a security deposit to further protect yourself from damages to your home and personal property.