Does my "renter's" insurance cover a relative who owns and also lives in the house?

[timmytimmy]

I (30M) live with my parents rent-free, embarrassment-free. They own the house and are self-insured, but they are at a net worth where they should probably be insured for liability (but they really don't need to be insured for personal property or dwelling).

- Can a homeowner take out a "renter's" insurance policy (HO-4) and be covered for liability? Does anyone have experience with this?
- I see that the standard HO-4 covers liability for relatives who live with the policyholder. If I take out an HO-4, it covers my parents who own the house and live with me in it, doesn't it? I'm not missing anything, am I? Will insurance companies decline to take out my policy?

[Empiricus]

I (30M) live with my parents rent-free, embarrassment-free...

- Can a homeowner take out a "renter's" insurance policy (HO-4) and be covered for liability? Does anyone have experience with this?
- I see that the standard HO-4 covers liability for relatives who live with the policyholder. If I take out an HO-4, it covers my parents who own the house and live with me in it, doesn't it? I'm not missing anything, am I? Will insurance companies decline to take out my policy?

Call an insurance company, tell them the facts, and ask them your questions.

[cheese_breath]

Sounds sort of fishy to me.

They own the house. They live in the house. They should have homeowner's insurance.

[Dottie57]

Sounds sort of fishy to me.

They own the house. They live in the house. They should have homeowner's insurance.

Home owner’s insurance, I believe, can be on the struction and inside finishing only. I don’t think you have to insure the contents.

This is an item that is needed for such a large amount of money.

[Kings over Queens]

I (30M) live with my parents rent-free, embarrassment-free. They own the house and are self-insured, but they are at a net worth where they should probably be insured for liability (but they really don't need to be insured for personal property or dwelling).

- Can a homeowner take out a "renter's" insurance policy (HO-4) and be covered for liability? Does anyone have experience with this?
- I see that the standard HO-4 covers liability for relatives who live with the policyholder. If I take out an HO-4, it covers my parents who own the house and live with me in it, doesn't it? I'm not missing anything, am I? Will insurance companies decline to take out my policy?

It's a valid question with an answer that might only be determined when a claim is considered. I had a carrier attempt to deny a claim where the daughter lived in the basement apartment and her dog bolted out the door from the main residence and bit someone. The daughter didn't have an ho-4 and the parents carrier was looking to deny. I was able to convince them that while there were separate living quarters, they managed the home as one with shared bills, meals together, etc., and they responded to the claim.

Assuming you aren't concerned about YOUR personal property, a better suggestion, all things being equal, would be to purchase a CPL policy in the name of the property owners right from the onset. The CPL isn't going to be much more money than the H0-4 anyway.

[quantAndHold]

Welcome to the forums!

“Self insurance” isn’t a thing. They either have insurance, or they are uninsured which means that they are accepting 100% of the risk for anything that happens to or on their property. You might be able to get a renter’s policy to cover your own possessions and liability, but it likely won’t cover any of their risks. An insurance agent would be able to answer your questions on that.

If the issue is that they just don’t have the money to pay the premiums, you might offer to pay rent in the amount of what the premium would cost, in exchange for them getting an insurance policy. If the issue is that they don’t believe in insurance, then I don’t know what to say.

[CAsage]

I'm guessing that, unless you are on the title, your parents will have to take out a HO policy. I also think it's likely that they cannot get a liability or umbrella policy unless they first have a HO policy. Unfortunately for them, if you do anything about the house that incurs harm, the harm-ee is likely to sue your parents as the homeowners and the potential deep pockets. So... you might look into a HO and an umbrella liability policy and offer to pay it for them, in lieu of rent?

[timmytimmy]

I appreciate everyone's thoughts. They are not convinced of shelling out five digits in HO insurance premiums a year to insure the dwelling for as much in deductible, when they can easily pay to rebuild the entire house and replace the belongings several times over.

In their view -- and honestly I agree -- physical damage is much more predictable and manageable than liability; so ideally they would like to be protected against liability but don't care remotely as much about physical damage.

Personally, I wouldn't mind paying to insure their (and my) liability, if the insurance company allows -- hence my question about me taking out the HO-4. The CPL is an interesting suggestion -- thank you.

[enad]

My understanding of renters insurance is that it typically does not cover structural damage to the entire house, even if you only rent a room, as it only covers your personal belongings and not the physical structure of the building which is usually covered under the landlord's (your parents) insurance policy. Seriously you should talk to a local insurance agent.

[Kings over Queens]

The CPL is an interesting suggestion -- thank you.

USLI offers such a product and I bet it wouldn't cost more than $500 annual for $500,000 of coverage.