Vacation home turned to rental - Insurance Issues?

[Varun Parkash]

Hey Folks, anyone in here knows the answer to this situation:

If you buy a vacation home and the appropriate insurance for it at closing and then the insurance company inspector comes and views your house after a month or so and it is vacant as expected - then things check out, but if they see tenants living in the house - then the owner of the house has to change the vacation home insurance policy to a renters insurance policy? If that's the case - do the insurance policy guys update the lender as well about it? Currently the price quote for a Single family vacation home in GA state  = $880/year excluding flood and earthquake. 

If its changed to include renters insurance = how much of a price hike in quote will be there? I think overall it is a much better idea to get renters insurance even if the home insurance policy guys find out or not if there's any tenants living in the house or not. Agree?