I'm currently on my second deal and having a little trouble with home insurance. I'm currently under contract on a single family home with a detached guesthouse. My plan was to live in the guest house and rent out the front house. I've had a couple companies say they can't insure me. I also had one company tell me that I need a separate policy on each (regular home insurance and rental property insurance). When I called USAA they told me I just need rental property insurance and renters insurance for myself. That didn't seem right to me so I just wanted to see what I should do. Thanks!
Interesting topic....I am definitely following this thread.
@Marvin Santiago From my experience...You would simply cover the primary SFR house as an "investment property", and list the guest house as an additional structure on same policy. Only the structures & liability would be covered, so you will need to add a renters insurance policy to cover you stuff you put "on or in" the guest house, and every tenant should carry same policy.
You should try NREIG, I use them for all my investment properties, they're the only true investor friendly company I've found that operates in all 50 states also and has saved me between 30-50% per property. You can get a free proposal here http://nreig.com/a/rbi/
The insurance company that told you need two separate policies was correct, since its two separate buildings they see it as two different risks, and its one of the ways to do it. You could also get one policy that covers both buildings, this policy should offer insurance for "other structure rented to others" this way can be cheaper.
And always suggest renters insurance to the tenants, it will give them protection for personal property and liability.
Thank you guys for your input. I think I will go with one policy to cover the whole property and require renters insurance for my tenants.
@Marvin Santiago 2 options, depending on how the property is titled.
1) If the property is in your personal name, your least expensive/best coverage option would be to write a Homeowners policy on the property you will occupy, with the 2nd building as a rental. Some companies can do this on a single policy, other will need to issue you a homeowners policy + a Rental dwelling policy.
2) If the property is in an entity other than your personal name, you will need to have both properties insured as Rental dwellings and write a renters policy for your personal liability and personal belongings.
As always, it's in your best interest to have your tenants carry renters insurance.
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