Author Topic: Homeowner's insurance for house with ADU  (Read 5223 times)

NinetyFour

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Homeowner's insurance for house with ADU
« on: January 14, 2014, 07:06:07 AM »
Hi--I have posted about my situation before.  I own a house with a detached ADU.  I live in the ADU, while I rent out the main house.

I am about to start shopping around for homeowner's insurance (and auto, as well) because I am probably paying too much.

My question is:  because I have a tenant in the main house, should that affect the amount of insurance coverage I should pay for in my homeowner's policy?

Many thanks!

NinetyFour

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Re: Homeowner's insurance for house with ADU
« Reply #1 on: January 15, 2014, 08:46:27 AM »
No responses?

* sad face *

jba302

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Re: Homeowner's insurance for house with ADU
« Reply #2 on: January 15, 2014, 01:22:33 PM »
This is not legal advice, my experience is from handling property claims only. You would probably benefit highly from running this by an agent who's familiar with the zoning in your area. My thought would be -

The house seems straightforward - get a landlord policy (either DP-1/2/3 or I think HO-8's work). Then make sure your tenant gets an HO-4 to protect their stuff and so they have liability coverage in case they burn your shit down. The landlord policies are a little cheaper than HO-3's because they don't cover all contents.

The ADU I'm going to guess on. My initial thought is that an HE-7 policy would be appropriate, which is a mobile home policy. It depends on the value of the ADU, the replacement cost, if there's any mortgage-type debt on it, and the value of the contents. You could go naked on it if it's cheap enough and without debt.

NinetyFour

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Re: Homeowner's insurance for house with ADU
« Reply #3 on: January 15, 2014, 04:30:30 PM »
Hi jba302--

Thanks very much for the feedback.

I will definitely consult my agent, but I assume he would want to sell me as much stuff as he can.  That's why I was hoping to get some thoughts here first.

My house (the one my tenant is in) and the ADU (which I am in) are on the same property.  The whole shebang is worth approximately $300K and I owe about $230K.

I sunk a whole lot of money into renovating the ADU; it is small but it is substantial, if that makes any sense.

I was going to tell you what I currently pay for homeowner's, but I don't have that info in front of me.  I will update later.

Thanks again!

_JT

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Re: Homeowner's insurance for house with ADU
« Reply #4 on: January 15, 2014, 04:53:41 PM »
Find a new agent if you can't trust yours to honestly advise you on your needs.

lakemom

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Re: Homeowner's insurance for house with ADU
« Reply #5 on: January 15, 2014, 06:06:41 PM »
What does ADU stand for?  thanks

NinetyFour

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Re: Homeowner's insurance for house with ADU
« Reply #6 on: January 15, 2014, 06:20:56 PM »
ADU = Accessory Dwelling Unit.  Fancy way of saying it's a detached unit on the same lot.

_JT, thanks for that suggestion.  Actually, I have had homeowner's with American Family for the past 6.5 years, and until now, hadn't even considered trying to get a lower price.  The guy who had been my agent just retired and handed me off to a new agent, who I have not yet met.  Maybe this would be a good way to introduce myself to him--have him come and look at the place and give me his take on it.

Thanks very much!

jba302

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Re: Homeowner's insurance for house with ADU
« Reply #7 on: January 15, 2014, 08:12:29 PM »
Make sure to ask the agent if living on premise in the ADU qualifies the house as owner-occupied in order to get an HO-3 covering everything. If he says yes, get it in writing. Then you should be able to get a straightforward HO-3 and your ADU would be covered under Coverage B (also ask this specifically and get it in writing). Otherwise, treat it as an off-premises rental property and a small house.

NinetyFour

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Re: Homeowner's insurance for house with ADU
« Reply #8 on: January 15, 2014, 09:10:47 PM »
jba302--thanks again.  I will definitely ask the agent about those ideas.

_JT

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Re: Homeowner's insurance for house with ADU
« Reply #9 on: January 15, 2014, 09:47:31 PM »
_JT, thanks for that suggestion.  Actually, I have had homeowner's with American Family for the past 6.5 years, and until now, hadn't even considered trying to get a lower price.  The guy who had been my agent just retired and handed me off to a new agent, who I have not yet met.  Maybe this would be a good way to introduce myself to him--have him come and look at the place and give me his take on it.

Thanks very much!

Absolutely. My agent is a guy I grew up with, but if I ever feel like he's milking me I'll dump him like toxic waste. Those guys work for you.