I am planning to buy a home with cash. So, I will rent this home in future. Do I need to buy home insurance? Should rental insurance purchase by tenant cover the liability?
If you are asking whether you need homeowner's insurance (landlord or fire policy) the answer depends on whether you would be sad if the house burned down. If you don't mind the hit to your net worth you don't need insurance.
If you are asking whether you need liability insurance the answer depends on whether an accidental death on your property that is in no way your fault or could be foreseen resulting in a $1.5 million judgement and $45k in legal fees would make you sad. Again, if you don't mind the hit to your net worth you don't need insurance.
If you are asking whether your tenants renter's insurance policy will protect you from a liability claim the answers is no. Renter's policies generally only cover the tenant's possessions. Chances are good your renters don't actually even have a renter's policy anyway.
Yes you ought to purchase insurance for the property. Renter's insurance purchased by a tenant covers their personal property, not the home. I think the only situation in which it would be rational to not purchase insurance is if you had so much wealth that the total loss of the home would be trivial, and you also had other coverage for any liability of owning and renting it.
Thank you for your prompt response. I want to go over all options before I purchase home insurance. And I do see now I have to buy the home insurance.
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