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sixfour

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Posts: 5
Reply with quote  #1 
I have recently moved out of my primary residence and close to having it rented.  I read somewhere that my homeowner's insurance will not cover my rental property. In fact, the story was about a guy who rented his previous residence and it burnt to the ground.  His home owner's insurance didn't cover this, not sure why. 

Can this be true?

If so, where do I get this landlord insurance? and does this replace my homeowner's insurance?

Also, a question on security deposits.  My rental is in California and I'm asking for first, last, and security.  Am I required to pay them interest on this money?  So I have to put the last and security into a savings account to accrue interest?  or just the security deposit?  How do you handle the taxes I would have to pay on the interest?

Thanks in advance for your help.


OHlandlord

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Posts: 3,809
Reply with quote  #2 
Call your insurance company and tell them the home will now be a rental.  They will convert the homeowners insurance into rental property insurance.  Easy as pie.  (You may want to tell them to put a rent insurance clause in if to pay for loss of income in case something happened.)

As for the deposit, you do not need to pay them interest on the money, but can only take 2 month's rent as a deposit.  (See CA Civil Code 1950.5 & 1940.5(g). )  The interest is yours so you have to include the amount you gain on your taxes.
sixfour

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Posts: 5
Reply with quote  #3 
As easy as pie.  In fact my premium dropped significantly.  Wish I would of known this when I moved out a couple of months ago.

Thanks for your help OH!
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