thank you for posing this question, because I have not been asked this before. I would have guessed exactly what Alexander pointed out. However it is interesting to see that in other states it differs.
SOMETHING TO NOT MISS! If you do in fact decide to rent out the home YOU MUST notify your mortgage holder that it is now an investment property. This could change the terms of your loan and your interest rate. But if you do not notify them and there is a problem, it could be bad news!
Also, you should always speak with your tax accountant about the implications on taking on an investment property. Depending on if this would be a gain or a loss yearly etc. The tax implications as well as a change in your mortgage terms could change your mind about renting, or strengthen the idea.
Cover all your bases to make sure you are making the best financially sound decision for you.
The other thing that most home owners do not consider when they are thinking about renting a once principal residense: You never know who you r renter is going to turn out to be. You could get a great tenant that takes impecable care of your home, or you could have someone that doesn't pay their utilities and turns into a squater. Ask yourself if you are in a finacial position to cover the costs of repairs if the worst happens.
Again, my apologies.
Philip J. Cunningham Sr
VIP Realty Corp 215-725-5700 X49
Let's see the answers nad the experiences of the PA agents.......
Realty Mark Cityscape
What a Perfect Question. Just yesterday I was quoted a Landlord's policy almost double to what i pay now as a Home owner. Here are the reasons why ( i am sure i am missing one or two reasons).
Reason 1) The insurance company knows that the renter will not take as good care of the property then if you lived there as an owner thus you are more likely to file a claim. 2) The landlord's policy has a Rental Loss protection that (if the property is damaged ) prevents you from renting it thus losing money....claim filed.
In General Landlord's policy is more risky for the insurer.
Realty Mark Cityscape
Make sure your tenants are advised to get renter's insurance and make sure you have them initial that the smoke detector is in working condition on move-in. State in the lease that you do not supply a fire extinguisher but one is highly recommended.
However, my experience has been that a landlord's policy is less expensive than a homeowner's policy. For instance, in a landlord's policy, you're not insuring the contents. That's the responsibility of the renter.
On the other hand, I'd also suggest you look into an umbrella liability policy. It'll cover your rental property as well as other things you insure (primary residence, car, etc.) The cost probably will be $300 or so for maybe $2 million worth of coverage. It's well worth the protection. Again, check with your insurance company or agent.
Hope that helps.