Dang insurance company question...?

Question

i am a home owner and moving out of the country for 1 year. i have rented my house out to a couple of tenants (same 2 people will occupy the house for the year). i have done this twice in the past and have home owners insurance and it has been ok because as long as the house is occupied by someone, it is not at that great a risk of break ins, fires, etc.

this time, my home owners insurance is forcing me to buy additional insurance from another company that will cover 'things that might happen while i am away.'

for example, they are forcing me to put up a railing next to the 3 steps that lead up to my porch because this is a 'safety risk' to my tenants...

why is my ins co making me do this? is this necessary? i thought that my home owners ins would cover the usual things and if the tenants want, they can take out their own renters insurance.

whats the deal?

Answer 1

Now you are a landlord, and you can be sued for physically hazardous and medically harmful situations, for example falling off the porch or mold in the house.  

Your homeowner's is not OK because the policy ususally has provisions saying you must be presently living in the house.

You need to buy landlord insurance incase they burn your house down.  If your homeowner's insurance co found out you were not living in the house at the time it burned, they won't pay out because you would be in violation of the policy.  Check your policy.  See if I am right.  Don't believe the agent.  Check the policy.  

Renter's take out insurance incase the house burns up and it is their fault; you should require they buy renter's insurance too, so your insurance co can sue their insurance co in case of a fire.

If property insurance was a "single payer" like all insurance "should be", then the cost would be very low.  Unfortunately it is profit motivated and not insurance coverage motivated, so people pay much more than would be required under single payer.  Keep the faith.  Maybe we can get single payer for health care AND property insurance.

Answer 2

1. Regular homeowners insurance covers owner occupied properties.  For rental property, the owner usually needs commercial insurance.

2. Homeowners insurance also covers liability.  If someone (either a tenant or a guest) is injured due to an unsafe condition and sues the property owner, the insurance company defends the owner in court or pays a settlement to the plaintiff.  The risk of a lawsuit for personal injury liability is much greater for the absentee owner of a rental property than it is either for a tenant or for the owner of an owner-occupied single-family property.

Answer 3

The three step railing is the norm, the insurance company or agent must have come to the house and noticed it and any insurance company will request a railing.  Also insurance companies do not think tenants will take as much care with your home as you would.  You could ask the tenants to take out renters insurance but your company still has a right to request you have additional insurance.

Answer 4

I am a homeowner of a two family house. Insurance company's demand things like the railing as a safety issue. They don't want a tenant falling and suing you and you in turn would turn it over to them.

There are things that you must provide a tenant that you might not have there for yourself. I had to install smoke alarms in all bedrooms.

Answer 5

The insurance companies are definitely hung up on the hand rail for 3 steps or more.  I'm expecting to hear from my new company any day now about my front steps needing it.  (The first step is all of 2 inches from ground level!)  It shouldn't be a big deal to put up a handrail.

Technically, because you won't be living there but will have tenants, unfortunately they are correct about needing more or different insurance.  Think about it - you won't be there and able to control things.  Your tenants, not being owners of the property, may not care quite as much as you about the property.  You definitely want to cover yourself because your liability really does go up.  

I know it stinks but I really think it's worth it to protect yourself.  Good luck.

Answer 6

LuvDylan had the best answer here.

You need a Rental Dwelling policy for the home since you do not live there and not a homeowners policy.

You should also require the renters to have renters insurance.  And, insurance companies can require you add safety features to the home as they asked you to do.   They can also require you to change your roof it is not in good shape.   They want to prevent a loss from happening.   That is good for you and for them.