Is It Possible to Get Homeowners Insurance on a Home You Don’t Own? Find Out!
Can I get homeowners insurance on a home I don't own? If you just inherited a house, you might be wondering the same thing. Find out here.
Did your parents pay off the mortgage on your childhood home years ago? While they’ve likely kept up with property taxes, you could nonetheless have some concerns about homeowners insurance. Or maybe you’re inheriting a great-aunt’s house that’s been sitting empty for years. Now, you’re wondering: can I get homeowners insurance on a home I don’t own?
Check Your Current Home Value
Curious how much your home is worth today? Answer a few simple questions about your home and we’ll provide you with a preliminary estimate in under two minutes.
There are times when you’d need to insure a home that you don’t own yet or is in a probate or trust state when you insure it. But getting homeowners insurance on a home you don’t own can be tricky, and not everyone can do it. Here’s how to know whether it’s a good idea and how to go about it.
Can I get homeowners insurance on a home I don’t own?
An insurance agent might let you take out an insurance policy for your parent’s house or another relative’s home, but you won’t be able to make yourself the beneficiary or receive any payouts if something happens to the house.
If hail damages the roof or a forest fire destroys a garage, and you need to file a claim for any reason, you won’t be getting the payout. The money would go to the current homeowner.
How can I determine if a house has insurance on it already?
First, try to find out if the house has a mortgage. Lenders require homeowners to carry insurance on any property that hasn’t been fully paid off, so if there’s a mortgage on the house, then it already has insurance. If not, the mortgage lender is doing something to remedy the situation.
If the property is a condo or co-op, the condo association or co-op board will have the same homeowner’s insurance requirements.
Lenders check with the insurance agent or homeowner periodically to verify that coverage is still active. If they’re not satisfied with the response, or if the homeowner doesn’t send proof of coverage fast enough, then the homeowner can be considered in violation of the mortgage loan’s conditions, and the lender may impose fines on the homeowner, and, in certain cases, even foreclose on the house.
If the house is paid off, it might or might not have insurance on it — there’s no real way to know. You could ask your grandparents (or the relevant relative in question), but they’re under no obligation to tell you. That said, most homeowners would want to protect their big investment from a total loss in the event of a disaster.
What if I’m inheriting a house?
When you inherit a home, you’re now a homeowner without the benefit of a home inspection, and depending on how well your relative maintained the home, you could be in for a few surprises. Make sure that insurance isn’t one of them.
Talk to your agent and a lawyer. The former homeowner’s insurance policy will no longer apply, so you’ll need to secure a new policy to cover the home.
If you don’t plan to live in the house but will be keeping it, then you may need to get a special policy called vacant and unoccupied home insurance. Some companies have a separate policy, while others offer this protection as an add-on.
The premiums on vacation and unoccupied homes are typically higher than for an owner-occupant. Insurance companies worry that no one would notice a burst pipe until it’s done significant damage, or that squatters could break in and vandalize a vacant home.
What if you’re going to sell? The good news is that even though the insurance will cost more if you hope to sell the house shortly, you can purchase short-term homeowners insurance policies for periods between three and six months.
You should definitely maintain a policy, even if it costs more than you’d hoped. If a potential buyer is injured during a showing, for example, you’ll want liability insurance coverage to protect your estate from a lawsuit.
