What to do about insurance if my husband and I purchased my parent’s home and are now allowing my mom to live there rent free while we continue to live in a rental?
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What to do about insurance if my husband and I purchased my parent’s home and are now allowing my mom to live there rent free while we continue to live in a rental?
Our insurance company insists that we should take out a renters homeowners policy on the house if we want to keep our renter’s insurance. Is this right? For tax purposes, we know we will be filing the home as “personal use” property. Also, would the problem be eliminated if we added my mom’s name to the title?
Asked on October 2, 2012 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
I would not add your mother's name to the title of the home that you and your husband bought. As to the insurance for the home, I would have the standard homeowner's policy in effect advising your insurance agent that your mother is not renting the unit, she is allowed to live there gratis and that your policy needs to be updated with your carrier to reflect such.
There is no need for a renter's insurance policy on the property unless your mother wishes to place one in her name.
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