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If a signed a home loan as the homeowner and 6 months later I cant pay it and I decide to rent it,?
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Do I have to pay renters Insurance? What if they deny it because of my loan status ( primary home).
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5 Comments
July 2nd, 2009 at 6:45 am
youre moving out and renting to someone else? youd be required to maintain insurance by the lender…the renter would not.
July 4th, 2009 at 7:20 pm
You could get it as a supplement to the homeowners policy. But what would that policy protect against that your homeowners policy would not?
July 7th, 2009 at 3:46 am
Renters insurance is for the renter to buy, not the owner. It protects the renters belongings, not the owners house and insures the renter against a liability claim. The owner should insist in the lease that the renter takes this insurance out and check that he has before releasing the keys.
The owner’s present property insurance probably excludes the owner from renting as this is an extra risk factor for the insurer. The owner can get an endorsement to add renting at extra cost. The insurers will not deny insurance because it is a primary home with a mortgage, but the mortgage holder may have an exclusion against renting in the mortgage agreement.
Renting can be a legal minefield for an inexperienced owner. You need to start with the right lease and be fully conversant with the laws of your state. You should use a rental company, their fee will be well worth the piece of mind.
Depending on the size of the loan repayment and the owners general financial position taking in a boarder may be another option.
July 7th, 2009 at 1:08 pm
NO. Renters insurance covers the TENANT and the tenant’s stuff inside the house. If you rent out the house, you’ll need LANDLORD insurance, sometimes called a DWELLING policy – it covers the BUILDING, if it burns down, if a tree falls on it, etc. It’s for policies where the owner doesn’t live there. Your mortgage company will require you keep the house insured.
A HOMEOWNERS policy, which you probably have now, covers the house while you’re living in it, and your stuff while you’re living in it. Once you move out of the house, you’re not living in it, which is why you need to switch to a dwelling policy.
July 10th, 2009 at 10:51 pm
You should purchase a dwelling policy instead of a regular homeowners policy. This may cost more but if you decide to keep a regular home owners policy any damage to the home may not be covered. You can require the new renters to carry renters insurance but that will only cover their personal belongings not the home.