Illegal detached garage apartment and insurance

[Hilary Panian]

I'm looking at a SFH that has a two-story detached garage that was converted into upstairs and downstairs apartments. The top apartment was approved as an ADU. During DD, it looks like the bottom apartment is unpermitted. There are existing tenants in both that sellers wants to stay (month-to-month leases in place). If we close and allow tenants to stay in unpermitted unit, will that void our home owners insurance policy if discovered/anything happens? We would like to look into bringing up to code/getting permitted down the road but want to make sure I'm not opening myself up to huge risk in the immediate. We did tell insurance agent the back had an ADU (didn't specify the permitted vs. non-permitted as we didn't know at the time). Thanks for any insights.