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Posts: 8
Reply with quote  #1 
I have a house that I an currently renting out.  I still have my homeowner's policy on this house.  However, I was told a few things- if I don't switch it out and there is a claim on my house, then the insurance company could refuse to pay for it.  Also that insurance for rental property is higher than homeowner's- seems silly seeing that their only insuring the dwelling and not the personal belongings.

Please advise.  I also am curious who has the best prices.

PS- does my mortgage (loan rate) also get affected by this?  I heard it is now considered an investment and therefore has a 1.5% higher interest rate.

thanks for your help

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Posts: 369
Reply with quote  #2 
Mortgages for investment properties typically are higher because they are more risk, but if you got the mortgage as a homeowner and it's a fixed mortgage, the rate cannot increase.

I have landlord policies through Allstate and they are a good company to work with.

Posts: 3,817
Reply with quote  #3 
You should change your policies to rental dwelling policies.  Some insurance companies will refuse to pay a claim if they find out it is a rental and you have not switched it.  My premiums are actually lower than my homeowner's policy, although I have heard others say thiers are not.  Rates for rental/investment mortages are higher, but few mortgage companies change your rates when you switch to a rental as long as you have held it as your home for a good period.  There can be a clause that can call in the mortgage or raise your rate if it is no longer owner occupied.  Its seldom used.  They just don't want you to take out an owner occupied mortgage only to turn it over to a rental in a year.

Posts: 2
Reply with quote  #4 
You should check with your insurance broker as to the difference in personal liability as to an owner-occupied home vs a non-owner occupied home.  I doubt the carrier would refuse coverage, however, depending on the nature of the claim and settlement provisions, there is a chance that you may not recover loss of rents and the liability may not afford as broad a coverage as an owner vs a landlord.

Check with your insurance broker.
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