Commercial Real Estate Analyst · Los Angeles, CA · Member since 2016 · 34 posts · 7 votes
Hi, I closed on an owner occupied triplex three months ago. I got a standard CA homeowner's policy that is $126/mo with a $1,500 deductible.
My Dad brought up that since I have tenants, I may need landlord's insurance that would protect me further. Does anyone have advice on whether I should keep my policy or switch to a landlord insurance policy?
Real Estate Agent · Chandler, AZ · Member since 2016 · 53 posts · 34 votes
9y
I agree. When you bought your policy they underwrote it as a triplex, owner occupied. The most important thing you can do in my opinion is be sure that your tenants know that you've got the structure covered, but that does not include their personal property. It's good to send a notice in writing explaining this to tenants and encouraging them to purchase their own renter's insurance policy.
I like to use an example of a pipe breaking. If their apartment is flooded, your insurance will pay to repair any structural damage to the building. But it will not buy them new furniture, etc.
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
9y
@Lance Knapp, if you hold the title to the property in your personal name and are living there as your primary residence, then you should be insuring the property with a homeowners policy.
If you asked for insurance for a triplex, the insurance carrier would assume you have renters. Ask your agent to show you where the policy states it is covering claims from tenants.
Owner occupied 2 & 3 unit buildings are traditionally insured with a homeowners policy.
Real Estate Agent · Chandler, AZ · Member since 2016 · 53 posts · 34 votes
9y
I agree. When you bought your policy they underwrote it as a triplex, owner occupied. The most important thing you can do in my opinion is be sure that your tenants know that you've got the structure covered, but that does not include their personal property. It's good to send a notice in writing explaining this to tenants and encouraging them to purchase their own renter's insurance policy.
I like to use an example of a pipe breaking. If their apartment is flooded, your insurance will pay to repair any structural damage to the building. But it will not buy them new furniture, etc.
Commercial Real Estate Analyst · Los Angeles, CA · Member since 2016 · 34 posts · 7 votes
9y
thank you for the informative replies! If I plan on moving out of my owner unit after a year, I imagine that I will need to switch to a landlord insurance policy.
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
9y
@Lance Knapp, that's correct. Any property that is not your primary residence and you rent out, should be insured with a landlord/rental dwelling policy.