Can I get Commercial Insurance on a Second Home Loan?

Question

Hello,

I am getting a second home mortgage with 10% down that I will be Short Term Renting when I am not there. I want to purchase a commercial homeowners insurance policy, and have a quote. Will this be allowed by my mortgage company (I'm using Rocket Mortgage)? Can you have a commercial insurance policy on a second home mortgage?

Andrew Postell · Answer

Account Closed your lender should be able to tell you what type of insurance you need.  They are usually specific about the amount of coverage really.  So as long as you lean on them to find out what they allow you will be ok.

Austin Spitzenberger · Answer

@Julia Ferris Were you able to get this figured out? Can anyone further clarify on this? I am in the same situation as you mentioned and trying to figure out if commercial liability will apply to these circumstances.

Joe Splitrock · Answer

Contact your insurance broker and explain the exact number of personal versus vacation rental days. Be aware since it is a second home loan you will not be able to claim 100% of your expenses. You are basically declaring occupancy that means primary use is a personal residence. You will be stuck prorating mortgage interest, taxes, utilities and insurance. As others said, since primary use is personal you may be able to just carry a personal policy that allows STR use.

John Mocker · Answer

Julia,

You may not have to go with a Commercial Policy.  More and More Personal Insurance carriers are allowing STR.  Some have restrictions on the duration of rental, total time rented, etc.  Check with an independent agent that represents multiple carriers and see if they have a solution for you.  If so, that will probably meet the Mortgagee's requirements