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Homeowners Insurance Question

1,448 Views | 13 Replies | Last: 7 yr ago by DrewAg27
Craigy
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I own a home that I own with zero balance (50k value) that I live in that's listed as a rental on my insurance. I own a home with a balance that is a rental ($300k value) that is listed with the same insurance company as a homeowners policy. My living situation was vice versa at one point. I want to do the right thing while protecting my financial interests . I can not afford a huge increase if the current homeowners policy turns in to a rental policy. Both house have always been insured by the same insurance company since 1992 and 2007. I suppose I could drop the policy where I live and change the other policy to rental insurance. I really don't want to have no insurance though, I don't want to deceive the insurance company. Hope this doesn't sound silly however I am looking for advice. Thanks
94chem
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Well, they won't pay your claim if anything happens and you were lying, so I think you'd better get it right. You could lie to your life insurance company about smoking, too, but I bet they'd do an autopsy before paying.
Jrod05
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AG
If it was like that at one point I don't see them not paying the claim but they could.

You most likely will see a price drop on the 300k home to move it to rental dwelling policy and an increase on your primary residence but it is a no brainer do it

The premium offset may surprise you.
Craigy
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I appreciate the response. I was assuming the 300K house going from Homeowners insurance to rental property would make those rates much higher on that house. I am correct?
IrishTxAggie
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AG
Pretty sure you're looking at some tax implications too. You'll likely lose your homestead exemption on the $300K house meaning they can jack up your assessed value w/o following the 10% cap rule.
CaughtAndDropped
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AG
CraigSU84 said:

I appreciate the response. I was assuming the 300K house going from Homeowners insurance to rental property would make those rates much higher on that house. I am correct?


It will probably be less. But as the above poster pointed out your primary you are currently living in will likely go up. I believe it is partly because the investment property insurance doesn't have to cover personal belongings...and that is probably where they have to pay more claims than the physical house. But not an insurance expert...but I do have several rental properties.
62strat
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AG
I think the real question here is.. you live in a $50K home?
Craigy
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62. Yes I do. It actually may be closer to 100k. What is your question? I don't have a balance on it and I have a small income. I live within my means. The only debts I have are reoccurring utilities and the mortgage on the

rental property that has a positive cash flow. I don't have a family so no one else depends on my house that I live in. I guess you statement was a jab at the worth of my house. Congrats if you have a nicer house. Life . You win.
LostInLA07
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AG
He was probably just commenting on your rental home being worth 6 times the value of your primary residence. It's more typical for those values to be flipped.
Jrod05
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AG
Craig rental insurance is cheaper typically than homeowners owner occupied.

One reason is because there is zero contents coverage and typically a higher deductible
Stive
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AG
94chem said:

Well, they won't pay your claim if anything happens and you were lying, so I think you'd better get it right. You could lie to your life insurance company about smoking, too, but I bet they'd do an autopsy before paying.
Nah....only if you die within 2 years of when the policy was taken out. After that, they typically can't challenge it.

94chem
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Stive, so as long as you're clean for the initial blood work, you can pretty much do what you want? Smoke crack while base jumping on a trampoline?
Stive
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AG
Pretty much
IslandAg76
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AG
A distant bell in my fogged brain...isn't a rental property deemed rental if 2 of 5 years it's rented...or something like that?
DrewAg27
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Rental policies on dwellings will typically be more expensive than owner occ if you want the policy to cover the same things (minus contents) with the same loss settlements. Reason bc maintanance is generally not as good, vandalism, malicious mischief, etc
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