Two Homeowner's Policies on One House - Owner Occupied (Airbnb)

[Mark N.]

I am new to real estate investing (and BiggerPockets), with three small rental condos in addition to our primary SFR home.

The neighborhood where my wife and I reside is experiencing a rash of Homeowner's (HO-3) non-renewals due to elevated fire risk in California. I have learned from neighbors that our carrier of 25 years will not be renewing any policies in our neighborhood. Our home renews in mid-May. Due to our claims-free history, we are in the process of switching our home, auto and umbrella to a carrier that appears to have the best claims record, which is key to us given the fire history in California where a few of our neighbors have had to go into the high risk pool.

The complicating factor I face: we want to keep our options open to offer our home as a PART-TIME short term or corporate rental (so the average rental stay would be 30 to 60 days). We are not going to know if we are going the part-time rental route with our home until after my wife learns about the future of her job (she has been reduced from full-time to part-time hours since the pandemic began and is at high risk of layoff come summer, meanwhile I can work from anywhere). The rental arrangement I have described would not be allowed under the carrier with the strong claims history that we want to go with. The quote was secured through Agent #1, who I hold infinite respect for.

A separate insurance agent, agent #2, who I reached out to simultaneous to agent # 1 provided me with an HO-3 quote through a different carrier with an excellent rider (I have read it) for covering short term and corporate rentals as long as our house remains our primary residence for at least 51% of the year (which is our desire - in fact we only want to rent about 90 or so days per year). The second carrier is a major challenge and problem to work with on claims per other homeowners in our neighborhood (and agent #2 agreed with my neighbors' assessment). Also the coverage is not so great, as they cap the maximum re-build cost 20% lower than carrier #1, even after agent #2 ran it past underwriting for an exception (with carrier #2's re-build cost being extremely tight on rebuild, so I only want no. 2's policy if the home is a part-time rental).

Based on the income that we would generating off any future, part-time rental of our home, I can easily afford to purchase BOTH policies, which is what I am currently leaning towards doing.

For those of you wondering why not change policies in several months when we know if my wife's job will went and we end up renting our house: insurance carriers are non-renewing policies right-and-left in my wildfire-prone neighborhood in the "Golden" state and there is a very real risk that Carrier #2 will stop issuing new policies, although their history to date is to continue renewing existing policies - and at halfway affordable rates - for those who got a new policy secured in the nick of time before new policies stopped getting issued.

I realize from other posts that carrying two insurance policies can be a red flag to an insurance company (although it is not illegal per the attorney I consulted - and, of course, I would only file on one if there were a loss plus my attorney advised me the insurance databases would pick it up in a New York minute, so he did not feel it was on the major end of red flag territory). My questions are:

(1) Should I pick up both policies?

(2) If I buy both Homeowner's policies, do I do this with the same agent, which would have to be agent #1 because she works with 50+ carriers, including carrier #1 and carrier #2? And does anyone know if an agent can place with two different policies simultaneously? (note: Insurance Agent #2 can only sell me the second, STR/corporate rental insurance policy.)

If anyone is wondering about other options, I have beaten the horse dead with two-weeks of calls between Homeowners (HO-3), Renters (DP-3) and Commercial policies only to receive a string of declines and "sorry, my carrier is exiting your market due to the high wildfire risk") and reflect my only options.

Thank you, in advance, for your insightful guidance. I am excited to be on the BiggerPockets forum and look forward to learning from all the excellent advice offered.