Keeping old owner occupied house buying duplex.

[Kirk R.]

Hi,

-I am planning to buy a duplex and rent out some rooms.  I will be owner occupying the duplex.

-I currently owner occupy a property and rent out some rooms.  I am planning to keep this property and continue renting rooms.

How do I most economically insure both places?

Will my current insurer cancel my policy if they know it's a rental?  Is there a cheap way to go?  My current policy is about $820 per year.

[Jeff Rabinowitz]

@Kirk R., most homeowners policies cover personal belongings, appliances, etc.  That is coverage that I have not seen offered in rental policies.  Speak with your insurance agent but I suspect you will have to cancel the existing policy and start a new rental policy.  I think you will find that the premium will decrease for the rental policy.  Of course, there will no longer be coverage for the contents of the home.

While you are speaking with your agent it may be a good time to see if they offer renter's policies.  Some landlords require their tenants buy these policies.  This type of policy will cover the tenant's stuff but may also give you some liability protection.  If the liability protection does not seem strong enough (it probably won't) you may wish to look into the coverage that an umbrella policy may provide.

If you find an insurance agent that helps you sort this out you may find that they may be able to give you significant discounts if you purchase all your policies through them.  Once you start buying rental properties (perhaps a vehicle or two) you may find that you have become a valuable client for an insurance agent.