Insurance for SFH House Hacking?

Question

Hello BP,

Currently closing on my first SFH in Portland, OR! The house can fit up to 6 tenants (5 tenants + me for the house hack). While shopping for insurance through various brokers and agents, most are telling me that the max "boarders" they allow is 2-3 per house. I do plan on enforcing renters insurance for all tenants. What are my options to insure the home? Should I be up-front and tell insurers the amount of tenants or not? Is there a specific endorsement for this strategy?

Thanks, Marty

AJ Shepard · Answer

@Marty Micek

If you are living in the house you should get homeowners insurance.  This policy will cover more than a landlord policy.

Oregon has a legal limit of 2 people per bedroom plus 1.  So if you are abiding by this you should be all good.  Ie if you have a 3 bedroom you would have the ability for 3x2 + 1 for 7 people.  If these people are in the same house as you it should be considered a household.  Insurance companies are not allowed to discriminate either.  You probably want to be careful with your diction.  Boarders indicates that you are running a sort of bed and breakfast which would be a commercial operation.  In reality you are providing long term housing with people living in the same quarters.

For instance, I have to allow a family of 7 into a rental, insurance has nothing they can say about it because it is legal for a 3 bedroom.  Household is not defined by family members, it’s by people living together.

Hope this helps, probably good to talk to some more insurance agents.

If you are concerned about tenants damaging the place, require renters legal liability.  Or just get a additional deposit.  Renters insurance only covers the renters belongings, not the landlords.  So in case of a fire, renters insurance would cover their clothes and bed, your insurance would cover your house.

Hope this helps!

Kenton LeVay · Answer

Congrats on the house! So I definitely would be up-front with the insurance companies and tell them the number of "boarders" you'll have. If you skirt around it and then try to make a claim you would be in a WAY worse spot than if you were just truthful up front. The reason they have a limit on "boarders" is because it's more risk for them, also I know there are some municipalities that limit the amount of non-related adults that can live together. Regardless, I'm not sure if there are any alternative policies other than just getting investment property insurance (similar to if you bought a multi-family and weren't house hacking). This is likely a higher premium so just work that into your numbers and you should be good.