Final answer:
A homeowner may add an additional residence premises endorsement to cover furnishings, protect from liability if a tenant or a repair person is injured on their property, and to secure the dwelling against damage or theft.
Step-by-step explanation:
When a homeowner with an insurance policy seeks to add an additional residence premises endorsement, there are a variety of reasons they may do so. This can include protection for personal belongings and furnishings, liability coverage in the event of a tenant's injury, and coverage for persons on the property performing repairs or maintenance.
For instance, if the homeowner supplies $50,000 worth of furnishings in her rental units, she will want to have these covered against damage or theft. In the case where a tenant is injured on the premises, the homeowner could be held liable, which is where liability coverage comes into effect, protecting the homeowner's financial interests. Similarly, if a repair person, such as someone coming to fix a broken window, is injured while on the rental property, the homeowner could again be at risk of liability. In both cases, liability protection is crucial.
Homeowners insurance policies pay out in various situations, such as when medical expenses are incurred due to an injury on the property, when a dwelling is damaged or burglarized, or when the policyholder dies. Additionally, homeowners have the incentive to insure their property correctly to protect their financial investments, such as furniture provided to tenants, and to secure their personal liability.