Thinking of Renting Out Your Home? Here’s What You Need to Know | Blog | Vargas & Vargas Insurance

Are you considering renting out your house? Maybe you’re thinking that it as a way to make some extra cash or maybe you’re moving but don’t want to sell your home. Whatever your reason, there’s something crucial you need to know: you’ll need to change your homeowners insurance.

Client’s learn this lesson the hard way when they decide to rent out their home. They thought their regular homeowners policy would cover everything, but they were wrong! Let me tell you why you need different coverage and what kind of insurance you should get.

Why Your Current Home Insurance Policy Won’t Cover Your Correctly

When you rent out your home, whether it’s for a long time or just a few weekends, your insurance needs change. Here’s why:

  1. Your tenants’ stuff isn’t covered: Your renters will bring their own belongings, and your policy will not cover their things.
  2. You might lose rental income: If a covered loss happens to your property and you can’t rent it out, you could lose money. Having the correct policy will help protect you from this loss.
  3. Insurance companies see more risk: When you’re not living in the home year-round, insurance companies think there’s a higher chance of something going wrong.

What Kind of Insurance Do You Need?

The type of insurance you need is called dwelling property insurance. It comes in different flavors: DP1, DP2, or DP3 policies. These policies are designed specifically for rental properties and can be customized to fit your needs.

Dwelling property insurance covers things like:

  • The structure of your house
  • Appliances and permanent fixtures
  • Lost rental income if your property becomes uninhabitable due to a covered event
  • Any liability that may occur at on the property

How It’s Different from Regular Homeowners Insurance

Your standard homeowners policy (usually called an HO3 or an HO5 policy) will not cover rental situations. Why? Because when you rent out your property, it becomes a business. Tenants might not take care of the house the same way you would, which increases the risk for insurance companies.

Here’s a personal example: When a client first rented out their vacation home, a pipe burst during a cold snap. Because they hadn’t updated their insurance, the damage was denied by the insurance company. It was a costly mistake that sadly taught them the importance of having the right policy in place.

When Might Your Current Policy Be Okay?

Some insurance companies might let you add an endorsement for occasional rentals. For example, if you’re only renting out your home for a few weekends a year, your current policy might cover it. But don’t assume – always check with your independent insurance broker-agent first!

When Do You Definitely Need Dwelling Property Insurance?

You’ll likely need a dwelling property policy if:

  • You don’t live at the property
  • You rent the property out
  • You use the property for short-term rentals (like Airbnb or Vrbo)
  • Your home has unique insurance needs (like an older roof) that makes a standard home insurance pricey

Be prepared to tell your independent insurance broker-agent how often you rent out the home, how much you charge, and how the property is used when it’s not being rented.

Short-Term Rentals Need Special Attention

If you’re thinking about getting into the vacation rental business, be aware that it’s not as simple as just listing your property on Airbnb. Standard homeowners insurance usually doesn’t cover short-term rentals except in very specific cases. You’ll likely need separate coverage, such as dwelling property insurance.

What About Your Tenants’ Belongings?

While some dwelling property insurance may cover your personal belongings left in the rental, it won’t cover your tenants’ stuff. It’s a good idea to encourage your tenants to get renters insurance (an HO4 policy) to protect their personal property. And, even require that they carry a renters policy and send you a copy of it each year at renewal.

The Cost of Dwelling Property Insurance

When it comes to the price of dwelling property insurance, there’s no one-size-fits-all answer. Just like homes, these policies come in all shapes and sizes. At Vargas & Vargas Insurance, we’ve seen quite a range. Some of our clients with basic DP1 policies pay as little as $700 a year, while others with comprehensive DP3 policies invest up to $5,000 annually.

Why such a big difference? Well, each policy is carefully tailored to fit the unique characteristics of the property it covers. Factors like the home’s location, size, age, and construction type and age of roof, plumbing, heating and wiring all play a role in determining the cost. Plus, the level of coverage you choose can significantly impact the price.

Remember, the cheapest option isn’t always the best. It’s about finding the right balance between cost and protection for your specific rental property. That’s where our expertise comes in handy – we can help you navigate these choices to find the best value for your situation.

Dwelling property insurance is competitively priced and covers many perils, including:

  • Fire
  • Wind and hail damage
  • Tornadoes
  • Lightning
  • Falling trees that hit your house
  • Burst or frozen pipes
  • Lawsuits

However, always read your policy carefully to understand exactly what’s covered and what’s not.

The Bottom Line

Renting out your property can be a great way to earn extra income, but it’s crucial to have the right insurance in place. Don’t make the mistake I did – update your policy before you start renting!

At Vargas & Vargas Insurance, we understand that every rental situation is unique. Our team of experts can help you navigate the world of dwelling property insurance and find the best coverage for your needs. Whether you’re renting out a room or an entire house, for a weekend or a year, we’ve got you covered.

Don’t leave your property’s protection to chance. Give us a call at 617-298-0655, and let’s make sure your rental adventure is a safe and successful one!

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What Happens to My Auto Insurance After a Hit & Run?

By carlos vargas • November 21, 2025
If someone hits your car and drives off, it’s called a hit and run . Imagine leaving the grocery store to find your bumper smashed with no note or witnesses. It’s not just the damage that’s frustrating; it’s the uncertainty about what to do next. Why Are Hit & Runs Confusing? Many drivers aren't sure what to do because we aren’t often taught how insurance works for these situations. But the more you know, the more protected you’ll be. At Vargas & Vargas Insurance , we guide drivers through hit and run claims, breaking down the process in simple terms. Key Questions Answered: What is a hit & run under Massachusetts law? What auto insurance helps in this situation? Will your premium go up? What immediate steps should you take? What Is a "Hit & Run"? A "hit and run" involves another driver damaging your car or injuring you and leaving without giving their info. It could happen in a parking lot, on the street, or even at home. Massachusetts law requires you to report it and file a claim. Coverage That Helps in a Hit & Run Your auto policy can help—if you have the right coverage. Uninsured Motorist Coverage (UM/UIM): Essential for covering injuries to you or passengers. Collision Coverage: Covers car damage but requires you to pay the deductible. Note: Massachusetts is a no-fault state , needing collision and/or UM coverage for protection. Will Your Insurance Rates Rise? It depends. If considered a not-at-fault accident, rates might not increase. However, lack of a police report or a history of claims might affect rates. Reporting it properly is crucial. What Actions Should You Take? Call the police immediately to file a report. Take photos of all damage and surroundings. Seek witnesses or security camera footage. Contact your insurance agent for advice on filing a claim. Keep all records , like police reports and photos. The Bottom Line You can't control reckless drivers, but you can control your preparedness. Here's what you need to know: Have collision and uninsured motorist coverage for protection. A police report is essential. Your agent is your best ally for making claim decisions.  If you’ve returned to your car to find damage without a note, you know the stress. Now you know the steps to take and the protections you need. At Vargas & Vargas Insurance , we’re here to make this simple and stress-free. Unsure if your policy protects you from a hit & run? Call us at 617-298-0655 . Let’s ensure you’re covered before it happens.

Personal Liability Insurance: What Happens When Someone Gets Hurt on Your Property

By carlos vargas • November 21, 2025
In this post, we'll guide you through what happens when someone is injured on your property, how personal liability insurance can provide protection, and the steps you should take immediately if an accident occurs. By the end, you'll understand common scenarios that trigger personal liability coverage, what's included (and not included) in a standard policy, how claims are managed, and practical tips to protect yourself both before and after an accident. Understanding Personal Liability Insurance Personal liability insurance is designed to protect you financially if you are found legally responsible for someone’s injury or damage to their property. Typically, this coverage is part of your homeowners or renters insurance policy. If an incident occurs on your property and you’re held responsible, your personal liability insurance can help cover: Medical expenses for the injured person. Legal defense costs if you’re sued. Settlement or judgment amounts awarded to the injured party. Without this coverage, you could face out-of-pocket expenses which could amount to thousands or even hundreds of thousands of dollars, depending on the situation. Common Injury Scenarios on Your Property Personal liability coverage may be applicable in situations like: A guest slipping on an icy walkway. A child falling off a swing in your backyard. A delivery driver tripping over a loose step. A neighbor’s fence being damaged by a tree falling from your yard.  Accidents can happen even if precautions are taken, and unfortunately, being "careful" doesn't automatically shield you from legal or medical bills. What’s Not Covered It's crucial to understand that personal liability insurance doesn't cover everything. Most policies exclude: Injuries to you or household members. Intentional acts causing harm. Certain high-risk situations, such as injuries from business activities conducted at home (unless you have separate business liability coverage). Understanding these exclusions can prevent surprises and the frustrations often accompanying a denied claim. What Happens After an Injury on Your Property If someone is injured on your property: Get medical help immediately — the priority should be the person’s safety and well-being. Document the incident — take photos, collect witness statements, and record all details. Notify your insurance company — report the incident promptly, even if unsure whether the injured party will make a claim. Avoid admitting fault — stick to the facts when speaking with the injured person and your insurer. Once a claim is filed, your insurance company will: Investigate the incident. Determine whether your policy covers the claim. Handle negotiations, settlements, or defense in court if necessary. How to Protect Yourself Before an Accident Happens While insurance covers the unexpected, prevention is better than reaction. Reduce your risk by: Keeping walkways clear of ice, snow, and clutter. Repairing loose steps, handrails, and flooring. Properly maintaining landscaping and trees. Providing adequate lighting for entrances and pathways. Regular maintenance not only keeps your property safe but shows responsible behavior if a claim is filed. The Role of Your Insurance Broker An experienced insurance broker can help you: Review your policy to ensure adequate liability coverage limits. Clarify exclusions so you understand what's not covered. Guide you through the claims process if an injury occurs. Suggest umbrella insurance for additional liability protection beyond your standard policy limits. Having a broker means you aren't navigating these situations alone — you'll have someone familiar with your policy advocating for you. The Bottom Line Accidents can occur anywhere to anyone at any time. If someone gets hurt on your property, personal liability insurance can safeguard your finances, cover legal costs, and help manage the situation professionally. The key is understanding how your coverage works before you need it. This involves knowing your policy limits, understanding exclusions, and ensuring you have sufficient protection in place. Additional Resources: Insurance Information Institute – Understanding Liability Coverage NAIC – Consumer’s Guide to Home Insurance