Common Exclusions in Rental Property Insurance Policies

Rental property insurance is designed for individuals who lease out residential homes, apartments or other dwellings. It may cover the structure itself and certain liabilities related to renting, but does not include every incident involving your property.

What Are Common Exclusions in Rental Property Insurance?

Understanding what your policy excludes can help you identify potential coverage gaps and take steps such as purchasing additional policies. Below are some common exclusions in a rental property policy:

• Wear and tear—Rental property insurance is intended to address sudden and accidental losses, not gradual deterioration. Damage from normal wear and tear, aging systems or lack of maintenance is usually not covered.
• Flood and earthquake damage—Standard rental property policies generally do not include damage caused by floods or earthquakes. In North Carolina, where flooding can be a concern, a separate flood insurance policy may be necessary.
• Tenant’s personal property—Your policy may cover the building and your own property, but not your tenant’s belongings. Tenants must secure their own renters insurance to cover their possessions.
• Intentional acts—Damage caused intentionally by you or your tenants is typically not included. This applies to vandalism or destruction done on purpose.
• Pest Infestations—Losses from termites, rodents or other pests are commonly excluded, as these are considered preventable with proper maintenance.
• Vacancy-related losses—If your property is vacant for an extended period, certain coverages may be reduced or excluded. Be sure to notify your insurer if your property will be unoccupied.
• Business activities—If you operate a business other than renting out the property, such as a bed and breakfast, your standard landlord policy may not provide coverage.

We’re Here to Help

Amato Insurance Group helps North Carolina landlords and property owners review policy details and address any concerns about exclusions. Our team can recommend personalized solutions. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.