Rental Property owner occupied vs non-owner occupied designation

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Rental Property owner occupied vs non-owner occupied designation

Manco Snead
Investor · Spokane, WA · Member since 2015 · 238 posts · 133 votes

Greetings,

Just moved into my owned duplex I'd been renting out for the last 10 years. I now live in one unit while adjacent unit rented out. Unsure how long I'll be living in it so left it as "non-owner occupied." About to do my taxes and don't want to screw it up, so wondering if I can leave it as is or should change it to "owner occupied" with my insurance. Originally bought as "non-owner occupied."

Much thanks.

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Andrew BornPro Member
Insurance Agent · McLean, VA · Member since 2018 · 13 posts · 7 votes
7mo

Since you’re now living in one of the units, the property is considered owner-occupied for insurance purposes. The policy should be updated because it now needs to include personal property and personal liability coverage for the unit you occupy, while still maintaining landlord-type coverage and loss of rents for the tenant unit. Talk to your insurance agent to get it updated. 

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  • Andrew BornPro Member
    Insurance Agent · McLean, VA · Member since 2018 · 13 posts · 7 votes
    7mo

    Since you’re now living in one of the units, the property is considered owner-occupied for insurance purposes. The policy should be updated because it now needs to include personal property and personal liability coverage for the unit you occupy, while still maintaining landlord-type coverage and loss of rents for the tenant unit. Talk to your insurance agent to get it updated. 

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    • Manco Snead
      OP
      Investor · Spokane, WA · Member since 2015 · 238 posts · 133 votes
      7mo
      Quote from @Andrew Born:

      Since you’re now living in one of the units, the property is considered owner-occupied for insurance purposes. The policy should be updated because it now needs to include personal property and personal liability coverage for the unit you occupy, while still maintaining landlord-type coverage and loss of rents for the tenant unit. Talk to your insurance agent to get it updated. 

      Much thanks. Got it. I'm not clear; i.e. if there is water damage from a leak how would that differ if it is in my unit vs the tenants unit. Guess I'm not understanding how me living in a unit differs from that of a tenant. Much thanks again. 
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  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
    7mo
    Quote from @Manco Snead:

    Greetings,

    Just moved into my owned duplex I'd been renting out for the last 10 years. I now live in one unit while adjacent unit rented out. Unsure how long I'll be living in it so left it as "non-owner occupied." About to do my taxes and don't want to screw it up, so wondering if I can leave it as is or should change it to "owner occupied" with my insurance. Originally bought as "non-owner occupied."

    Much thanks.


     You should notify your agent immediately.  Any change in usage can trigger a coverage gap or total denial of coverage.

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  • Janice Carter
    Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 605 votes
    7mo

    I agree with Andrew and Owen, update your insurance to owner-occupied now that you are living in one unit. Leaving it as non-owner occupied can cause coverage issues. 

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