Homeowner's Insurance... Confusion...

[DrDrew]

I'm doing the walk from my condo... last week I called to change the insurance company that I had renters in instead of me and I needed to update my insurance.

They told me:
1. I had been paying for renters' insurance all along and not condo owners' insurance (!) and apparently my mortgage co. had never checked on it.
2. Because my house is on the market they don't have a product for that and would be cancelling my insurance (!!).

Now I'm wondering
1. Is it worth it to call my mortgagor and tell them I am no longer 'insurable' and they'll need to deal with it?
2. Anyone know of insurance companies that will cover properties that are not owner occupied but are on the market?

Thanks!

(And, yes, for those of you who are going to say "just take it off the market and get landlord's insurance"... I'm thinking about doing that.)

[TomEason]

I'm doing the walk from my condo... last week I called to change the insurance company that I had renters in instead of me and I needed to update my insurance.

They told me:
1. I had been paying for renters' insurance all along and not condo owners' insurance (!) and apparently my mortgage co. had never checked on it.
2. Because my house is on the market they don't have a product for that and would be cancelling my insurance (!!).

Now I'm wondering
1. Is it worth it to call my mortgagor and tell them I am no longer 'insurable' and they'll need to deal with it?
2. Anyone know of insurance companies that will cover properties that are not owner occupied but are on the market?

Thanks!

(And, yes, for those of you who are going to say "just take it off the market and get landlord's insurance"... I'm thinking about doing that.)

DrDrew
Thanks for your question. I'm unclear why this is a matter of concern for you. If the condo is now vacant and is going to FC, why would you want to pay for insurance? Your lender will "force place" a policy to protect their interest and add the premium cost to the amount you owe. But you no longer care about that because you won't be paying the amount owed on your loan anyway. But, I do like your last thought, which is the path I would choose. Good luck!

[DrDrew]

The place isn't vacant right now... I'm renting to some friends... they're just paying to cover the HOA fees and keep the place from being vacant.
My only real concern is that I own a place that isn't insured... won't 'something bad happen to me' if the place gets flooded or burns down or... and I don't have insurance?

[SurfwhenUcan]

Your HOA fees don't include insurance? Maybe you posted that on another post.

[TomEason]

The place isn't vacant right now... I'm renting to some friends... they're just paying to cover the HOA fees and keep the place from being vacant.
My only real concern is that I own a place that isn't insured... won't 'something bad happen to me' if the place gets flooded or burns down or... and I don't have insurance?

DrDrew
Thanks for your update - hadn't realized you have friends occupying. If I were you, I'd ask your friends to vacate and rent the condo out to get some cash flow. That is, unless your income is such that it would make that rental income insignificant, or if you just enjoy being charitable to your friends. But, if you allow them to remain, require them to pay enough to cover a landlord policy, just in case one of your "friends" gets injured and decides to sue you. And as SurfwhenUcan states, your HOA provides some insurance, but unfortunately not liability coverage. Good luck with whatever you decide.

[DrDrew]

My HOA fees cover insurance 'studs out'... which, my understanding, wouldn't cover internal water damage, fire that didn't hit the outer area... Yep, I'm being a bit charitable. I can afford to be... but I can't get a landlord policy through my insurance agency because the home is on the market... I could get a landlord policy and NOT have the home on the market... My lease agreement covers liability issues with the tenants and their guests as well as freeing me from repairing any systems that break down or get damaged...

[TomEason]

DrDrew
Thanks for your update. Yeah, the HOA insurance coverage varies, but it's always contained in the CC&Rs. You "studs out" coverage is not uncommon. I understand your insurance companies stance on this. Beware, although your lease agreement might seem to protect you from liability issues, it won't do that. It will cover damage caused by your tenants' and guests, but it won't prevent a landlord from being sued for an injury to the tenants or guests. You still have that liability exposure, which cannot be legally relieved by a tenant's agreement in a lease.

A suggestion I might make is that you require your tenant friends to get and pay for a renter's policy. They're inexpensive, and offer coverage to protect the liability of the landlord, as well as lots of protection for the renters, like theft of their possessions, etc. I learned the hard way some years ago, to require a renter's policy as a condition of the rental agreement. And the landlord must be listed on that policy as an additional loss payee. You might check with your insurance agent to confirm what I'm saying is factual. Good luck.