I’ve found myself in a bit of a perplexing situation regarding homeowners and landlord insurance.
To give you some background: my wife and I are moving into her mother’s house while simultaneously purchasing a new one for her mother. We’ve decided to put the new house solely in my name, considering family dynamics and the eventual need for care when her mom can’t live independently anymore. Consequently, we won’t be added to the deed for my mother-in-law’s house, although my wife is listed as a beneficiary.
Now, I’m trying to figure out the best insurance arrangement. Should I get homeowners insurance for the new house, while having my mother-in-law obtain renter’s insurance, even though she doesn’t pay rent? Alternatively, can she keep her homeowners insurance and we secure renter’s insurance for living in her old home?
Or do we both need to look into landlord insurance and renter’s insurance?
I reached out to agents from two different companies, and they provided conflicting advice…
It sounds like you’re in a unique situation that can indeed be confusing when it comes to insurance. Here are some points to consider:
Homeowners Insurance: Since the new house is in your name, you should definitely get homeowners insurance for it. This will protect your investment in the new home.
Renter’s Insurance: Your mother-in-law can get renter’s insurance for her old home, even if she isn’t paying you rent. Renter’s insurance can cover her personal belongings and provide liability coverage while she lives there.
Keeping Homeowners Insurance: If your MIL wants to keep her homeowners insurance on the old house, that may be an option as well, especially if she intends to maintain it as a primary residence. It would typically cover the structure of the home, but it might lead to complications since you also plan to insure it under a rental scenario.
Landlord Insurance: If you plan to rent to someone else in the future or if you would like to treat the situation like a rental property (even if it’s family), landlord insurance may be more appropriate for your new house. However, if you aren’t renting it out, regular homeowners insurance is the way to go.
Consult a Specialist: Given the complexity of your situation, consulting with an independent insurance agent who can evaluate all aspects of your scenario might be beneficial. They can help clarify the best course of action that complies with insurance regulations and meets your needs.
Ultimately, it seems most straightforward to have homeowners insurance on the new house and renter’s insurance for your MIL in her old house. Ensure to document the arrangements so that everyone understands the living situation clearly.