I see this question often in plenty of Facebook Investor and Real Estate pages. And while I commend the author of the post for asking the question, and for starting the process of looking into getting a proper Landlord Policy, my answer will always be the same: Yes, you really do need a Landlord Policy, and here’s why:
While the first lines of coverages may look the same : Dwelling, Separate Structures, Loss of Use, and Guest Medical, the risks are different and therefor the policies are different. If you insure your rental as if it were a standard homeowners policy, indicating that you yourself live in it and not renting it out to others, you are putting yourself and the property at risk for not having any coverage at time of Loss.
It goes unsaid that every Insurance Carrier requires that the policy be written correctly, and if the policy was knowingly written incorrectly (in this case, by you the owner looking to insure the property as a Homeowners versus a Rental), there would not be any coverage extended if there was a loss.
An example of this would be if your Tenants caused a fire; YOUR Insurance would be the policy would have been the policy that would cover the building as even if your Tenants had Renters Insurance, Renters Insurance does not cover the Building, just their own personal belongings, personal liability and own personal loss of use. If your policy were not written correctly, the Dwelling limit on your Homeowners Policy would not be extended as that coverage was only available if you were living on the property versus your Tenants.
Also, without a proper Landlord Policy, you, the Landlord would not have proper Liability Coverage that would protect you from liability concerns you may face as the owner of the property.
And of course, one of the most important coverages for many if not all Landlords that I’ve encountered: Loss of Income/Rents, would not be available if there were a loss and you were unable to rent your Property while it sat unoccupied during renovations as Loss of Income/Rents is not a coverage on standard Homeowners polices.
It may sound like there wouldn’t be any harm in insuring your Rental as a Homeowners policy, but by doing so you are risking not only your property and rental income and liability coverage, AND just because you don’t have proper Landlord Liability coverage it doesn’t mean you still won’t be sued as you are the property owner; which means that you’ll have to pay the lawyer fees and judgement out of pocket - all to save a little bit of premium up front.