Home insurance on insurance when living in guest house?

[Marvin Santiago]

Hello everyone,

I'm currently on my second deal and having a little trouble with home insurance.  I'm currently under contract on a single family home with a detached guesthouse.  My plan was to live in the guest house and rent out the front house.  I've had a couple companies say they can't insure me.  I also had one company tell me that I need a separate policy on each (regular home insurance and rental property insurance).  When I called USAA they told me I just need rental property insurance and renters insurance for myself.  That didn't seem right to me so I just wanted to see what I should do.  Thanks!

[Jason Bott]

@Marvin Santiago 2 options, depending on how the property is titled.

1)  If the property is in your personal name, your least expensive/best coverage option would be to write a Homeowners policy on the property you will occupy, with the 2nd building as a rental.  Some companies can do this on a single policy, other will need to issue you a homeowners policy + a Rental dwelling policy.

2)  If the property is in an entity other than your personal name, you will need to have both properties insured as Rental dwellings and write a renters policy for your personal liability and personal belongings.

As always, it's in your best interest to have your tenants carry renters insurance.