I’ve found myself in a bit of a puzzling situation regarding homeowners and landlord insurance. Here’s the situation: My wife and I are moving into her mom’s house, and we recently bought a new house for her mom. Due to family dynamics and future planning for when my mother-in-law will no longer be able to live alone, the new house is solely in my name. We won’t be adding anyone to the deed of my mother-in-law’s house, although my wife is a beneficiary.
Now, I’m trying to figure out the best insurance coverage. Should I get homeowners insurance for the new house and have my mother-in-law obtain renter’s insurance, even though she isn’t actually paying rent? Or can she maintain her current homeowners insurance while we get renter’s insurance for living in her former home?
Alternatively, do we need both landlord insurance and renters insurance?
I’ve reached out to agents from two different companies, and I received conflicting information from each. Any advice would be greatly appreciated!
It sounds like you’re navigating a unique situation, and it can definitely get confusing! Here are a few points to consider regarding homeowners insurance, renter’s insurance, and landlord insurance:
New House (Your Name Only): Since the new house is in your name, you should get a homeowners insurance policy for that property. Homeowners insurance will cover the structure of the new home and your personal belongings inside it.
MIL’s Current House: If your mother-in-law (MIL) is living in her current home and isn’t paying rent, she can still maintain her homeowners insurance for the time being, assuming she still owns the property. However, depending on the insurance policy and state laws, she might need to inform her insurance company about her living situation, especially if she’s no longer the primary occupant.
Renter’s Insurance for MIL: Since she isn’t technically renting, it might be a bit tricky to get her renter’s insurance, but some companies could offer it since you are family. It would likely be better for her to retain her current homeowners insurance unless advised otherwise by an insurance agent.
Landlord Insurance: If you plan on renting out the new house in the future or if there are any tenants in the property where she lives, landlord insurance would then become relevant for that scenario, typically covering properties that are rented out.
Consult with Agents: Since you’ve received different answers from two different agents, it might be beneficial to talk to a third agent or a specialized insurance broker who can help clarify your specific situation in detail. Provide them with all the details about your living arrangements, ownership structure, and long-term plans.
Documentation: Make sure any policy you pursue is backed by clear documentation detailing the ownership, living arrangements, and any additional agreements you might have in place.
Ultimately, the insurance decisions should align with both the ownership and living situation. Make sure to clarify these details with your agents to make an informed decision. Good luck!