Homeowners Insurance on a House Hack

5 Replies

Hello everyone,

I am well into escrow with a 4plex house hack (primary residence) that I am doing. I got two quotes for homeowners insurance. One quote is nearly double the amount than the other quote. I asked the broker why their quote was so high and they said because it is being treated as a rental property and lenders require insurance for rental income. On the surface it makes sense, but why would it be double the premium. Any help or insight on this is appreciated, thank you.

Regards,

Jason,

Just want to make sure I'm looking at this correctly.  You are buying a four family that you will be one of the occupants.  If that is the situation, then you could insure this under a Homeowners policy with a company that accepts 4 families (not all will take 3 or 4 family owner occupied houses).   If you are not going to live there then it does not qualify for most homeowners policies .  For that situation you would insure it under a Dwelling/Fire policy or under a Commercial Business Owners or Package policy.  

The standard Homeowners policy includes a coverage called Loss of Use.  This coverage provides for the additional living expenses you incur because you can not live there.  It also includes the loss of rental income.   Something does not add up in the explanation.  We have over 30 companies so I do a lot of comparison shopping for my clients.  The differences between companies on the same policy can be that drastic.  Good luck with the new house.

John,

That's exactly the answer I was searching for. I spoke with the less expensive mortgage broker and I asked about loss of rental income and he said it would come out of Section A, dwelling. If that was needed, its good to know that its covered either way.

Regards,

I am shopping for homeowners insurance on a triplex house hack, owner occupied property and am having trouble getting a reasonable premium. Any info on who you decided to go with would be helpful. Or any recommendations. Thanks

@LIAM COUGHLIN

Hi Liam,

Insurance requirements and underwriting guidelines vary by state. You should find an insurance agent/broker in your state to talk about the specifics.

Important factors to consider included the name the property is title under (llc, trust, individual, etc) This particular portion will determine how you move forward.

Regards,

Tommy Brown

CA Insurance Lic # 0K51144