NWR: Insurance

timewellwasted93

So this whole growing up and living on our own has been great, but BF and I hit a snafu, along with his mom. She moved out in May, gave us her house but continues to pay the mortgage and homeowner's insurance so I can finish school and not work more hours (which is awesome of her), and she moved in with her then BF, now FI. They get married in April next year.

She just got a letter from the insurance company saying they're cancelling her homeowner's insurance since she no longer lives here. Which I guess is a policy they have that we have to follow no matter what, but I just always thought if you own the home, you have homeowners insurance. She thought the same too.

So she calls them, explains the situation, and they tell her she has to get rental insurance, and it doesn't matter that her son (or any relation) lives here, if she's not here she can't have homeowners insurance (even though she owns the home). We have to get renter's insurance as well (which she offered to pay but it still sucks).

The icing on the cake? They told her that since she's not married to her FI yet, none of her stuff is covered under her FI's homeowner's insurance even though she lives there, so she has to get a tenant policy! I lived here (her house) for about a year and a half before, and none of us had any inkling that my things weren't protected, and she's lucky she found out now before anything potentially happens to her stuff too.

I just find the whole thing ludacris. I'm brand new to being one hundred percent responsible for myself thing (and I'm not even paying for everything so I guess I'm at 75%), and I had no idea about all these random things that would pop up. And she's been a home owner for years and had no clue either!

Has anyone ever been in this situation? Or understand insurance more than the rest of us? Comments? Questions I need to ask? I don't really know what I need here. It just seems odd. We've got until the beginning of October to get things straightened out. Also, we live in MD in case these things differ state by state.

Oh and I just remembered my mom's BF lives with my mom in her house, and I doubt he has a tenant policy! I've got to let them know too. She's had a few people live there (helping out friends) and has never mentioned these insurance policies before.

luckya23

She will probably need to get a rental property insurance policy.  My ex had a house he rented out, and the rates are much higher, but they obviously exist.  How many people rent in this country??  Obviously those properties are insured. 

ETA: These policies cover the STRUCTURE ONLY.  You WILL need to get a renter's insurance policy for the contents.

cupcait927

Yes, I do know that if your mom is not living in the residence she owns and is renting it out, then she needs a rental insurance property policy.

As far as not being covered, I'm not covered under the homeowner's insurance policy on our house either. FI purchased the house in his name (I pay half of everything to him) and the insurance policy only covers his things. The agent told FI that I needed to continue the renters policy I had while living in our new house until we are married.

flyingfoxes

Yeah my FI's house in AZ that he's stuck with has outrageous premiums and deductible because it's rented out. 

I risked it when I moved out when I put my house on the market in July.  It was empty for 2 months - my insurance would have canceled me if they'd known it was vacant.

timewellwasted93

@cupcait927 Is there a difference between renter's insurance and tenant? In the case of BF's mom needing insurance at her FI's house? She used the terms separately, renter's for us and tenant for her.

My mom's BF rented an apartment, which he allows his ex to live in and care for and he lives with my mom. So would his renter's insurance from that still be okay for his stuff in my mom's house? I have no clue if he even still has the insurance, but I would have hoped if my mom knew about this she would have let me know when I lived here before and this time around, since apparently I'm not covered at this moment in time too.

I feel like not a single adult person I know understands insurance fully, because someone should have realized I have had no insurance protecting my things by now. My grandparents, or maybe my aunts or uncles or someone. 

I'm definitely learning quickly about all the hidden things one has to think of and understand so they don't screw themselves over in the future. 

They should have classes on how to be an adult. Or maybe teach this shit in high school economics or something. I recommend a "how to function properly as an adult" class that teaches how to: budget, live within your means, do taxes, understand insurance/mortgages/bills/all contracts, save, invest, and not be an asshole.

luckya23

timewellwasted93 said:

@cupcait927 Is there a difference between renter's insurance and tenant? In the case of BF's mom needing insurance at her FI's house? She used the terms separately, renter's for us and tenant for her. 

At the address you live in: she needs a rental property insurance aka "landlord insurance." which will cover the structure in case of fire, etc. You and FI need renter's (tenant) insurance to cover the items in the home.

At the address she lives: she needs renter's (tenant) insurance to cover her item's in her BF's home.

My mom's BF rented an apartment, which he allows his ex to live in and care for and he lives with my mom. So would his renter's insurance from that still be okay for his stuff in my mom's house? No, property insurance is tied to the address.  I have no clue if he even still has the insurance, but I would have hoped if my mom knew about this she would have let me know when I lived here before and this time around, since apparently I'm not covered at this moment in time too.

I feel like not a single adult person I know understands insurance fully, because someone should have realized I have had no insurance protecting my things by now. My grandparents, or maybe my aunts or uncles or someone.  Lots of people don't bother to insure their things.  I think I've been the only one I knew with renter's insurance.

I'm definitely learning quickly about all the hidden things one has to think of and understand so they don't screw themselves over in the future. 

They should have classes on how to be an adult. Or maybe teach this shit in high school economics or something. I recommend a "how to function properly as an adult" class that teaches how to: budget, live within your means, do taxes, understand insurance/mortgages/bills/all contracts, save, invest, and not be an asshole. Wouldn't that be nice!

littlemushroom

There is not a difference between renter and tenant insurance.  The two terms are used interchangeably.

The owner of a rental property has to have insurance which covers the structure of the property (and sometimes the items included in the rental that are provided by the owner, such as appliances).  It also includes liability protection (typically) for the owner of the property.

The renter (or tenant) of the property would need to get insurance which covers the contents of the property only if they want coverage for their belongings.  It is not required, but it is a good idea.  My renter's insurance is incredibly inexpensive (I got mine through the same insurance company as my car insurance).

Homeowner's insurance covers both the structure of the property and the contents of the property that are the homeowner's.

Renter's insurance is specific to the location.  So your mom's BF's renter's policy covering the apartment he doesn't live in will not help him if something happens to his stuff at a different place.

FWIW, my sister has lived with me for years and I am the only one who has renter's insurance.  If something were to ever happen to our house, I would use the coverage to replace her things (basically just claiming they were mine).

ETA:  Renter's don't "have to" have insurance to cover their things.  It's just a good idea.

timewellwasted93

NikkiJay3333 said:

There is not a difference between renter and tenant insurance.  The two terms are used interchangeably.

The owner of a rental property has to have insurance which covers the structure of the property (and sometimes the items included in the rental that are provided by the owner, such as appliances).  It also includes liability protection (typically) for the owner of the property.

The renter (or tenant) of the property would need to get insurance which covers the contents of the property only if they want coverage for their belongings.  It is not required, but it is a good idea.  My renter's insurance is incredibly inexpensive (I got mine through the same insurance company as my car insurance).

Homeowner's insurance covers both the structure of the property and the contents of the property that are the homeowner's.

Renter's insurance is specific to the location.  So your mom's BF's renter's policy covering the apartment he doesn't live in will not help him if something happens to his stuff at a different place.

FWIW, my sister has lived with me for years and I am the only one who has renter's insurance.  If something were to ever happen to our house, I would use the coverage to replace her things (basically just claiming they were mine).

ETA:  Renter's don't "have to" have insurance to cover their things.  It's just a good idea.

So BF's mom left everything but her clothes and one cat in this house. All the furniture, appliances, dishes, whatever is in her safe, everything is still here. She plans on getting more stuff but hasn't decided what yet.

 Is that going to be covered by her or us? I guess we can do the same as you and claim it as ours if something did happen. I didn't even think about that being a possibility.

Also I don't understand people who don't get insurance. I'd rather be safe than sorry. It's just something I've always been told is really important, but no one bothered explaining all the nuances.

timewellwasted93

Random thought: What about people that have two homes? For example, my younger siblings' grandparents have a primary residence in one state, but own a second home in another near family. They don't rent it out, and only visit for a week every couple months or so. So they don't technically live there, but they don't rent it out. What kind of insurance covers that?

I know a few families that have beach houses that they only allow family to use. So would that be a rental? Or is there another category of insurance that I'm missing?

littlemushroom

Is she gifting you those things? If the fridge died tomorrow, who would replace it? Her or you and your BF?

If those things are still hers and just come with your rental, then she needs to work with her insurer to get a rental owners policy that covers those things.

If she gifted it all to you and you will take it all with you when/if you guys move, then you would cover it under your policy.

When you "rent" from family, there are some very specific rules about what is or is not allowed. Try to game the system, then if there is a claim one of you could be investigated for insurance fraud.

Both of you should talk to your insurer, explain the situation exactly as it is, and see what your insurer recommends.

timewellwasted93

NikkiJay3333 said:

Is she gifting you those things? If the fridge died tomorrow, who would replace it? Her or you and your BF? If those things are still hers and just come with your rental, then she needs to work with her insurer to get a rental owners policy that covers those things. If she gifted it all to you and you will take it all with you when/if you guys move, then you would cover it under your policy. When you "rent" from family, there are some very specific rules about what is or is not allowed. Try to game the system, then if there is a claim one of you could be investigated for insurance fraud. Both of you should talk to your insurer, explain the situation exactly as it is, and see what your insurer recommends.

That's a good question. We're replacing a window that has a crack in it ourselves, but she promised to help with any big expenses we can't cover (she even offered to cover any bills we can't pay, but we have enough for everything and are able to save a bit each month). I need to confess: she's been so generous, but I can't stand her at all so one day you'll all be shocked when I tell you stories of how horrible she can be. It's hard to be so thankful to and so full of rage for one person at the same time (though I think some of you can attest to that).

She wants some furniture, and she'll eventually get all her decorations and candles and pictures, but we're free to get rid of things (as long as we run it by her first) and we do have a few pieces of our own that we will be getting soon. Plus we do plan on replacing dishes and pots and pans and whatnot when we get eventually get married. I have no clue what we would take with us when we move, which we will but not for another 4 or 5 years at the earliest.

I'm thinking we need to figure these things out with her first, then take a list of questions to the insurance company and figure out the rules for all of this. Thanks for bringing that up though. Once again, not something I would have thought to ask.

littlemushroom

There is insurance specific to properties that are vacation homes. The type of policy needed on a second home will vary greatly depending on location, primary use, how often it is occupied, etc.

timewellwasted93

NikkiJay3333 said:

There is insurance specific to properties that are vacation homes. The type of policy needed on a second home will vary greatly depending on location, primary use, how often it is occupied, etc.

BOX

I'm glad someone know's what they're talking about. Seriously, I feel like I wasn't prepared for the real world. Then again, BF's mom and her FI didn't know this stuff, so I guess I shouldn't feel so stupid.

Thanks for all your help. You've given a better explanation than I've gotten from anyone actually involved.