Who holds the responsibility to ensure that I have adequate home insurance?
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Asked September 20, 2013
Most of the time, the homeowner is the sole person responsible for making sure that a home is adequately insured. However, the mortgage company or lender may have a say, and if the home is a rental property then the responsibility will be shared between the owner and the renter. A tenant in the home is responsible for providing their own liability and personal property coverage. As you see, who is responsible will depend on what is being covered.
If there is a mortgage on the home, the lender or mortgage company has the right to require certain minimum coverages. These include mortgage insurance to protect the interests of the lender and homeowners insurance to cover the risks of the borrower. The mortgage company cannot require you to purchase from their selected carrier, but some states will allow them to bundle the policy directly into the mortgage.
A homeowner's policy is purchased by the homeowner and covers the dwelling, other structures, liability concerns, and loss of use. Any portion of the property which is rented out is excluded from liability and loss of use coverage on the home policy. If the owner does not have adequate insurance, he is personally responsible for all costs related to the insufficient coverage.
A tenant in the home is not covered by the homeowner's policy, except where the structures and dwelling are concerned. All other insurance is the responsibility of the tenant, including damage and personal injury liability and personal property insurance. The tenant is personally responsible for any losses or damages above the limits of their renter's insurance policy.
Contact local home insurance agents to get free quotes.
If the dwelling, structure or physical property causes damages or injuries to the tenant or their guests, then the tenant has the right to file a claim against the policy of the home owner. For example, if a visitor tripped on a loose brick in the walkway and broke an ankle, the homeowner's policy would cover the injury, but if the ankle was broken tripping over the tenant's rug, then the tenant is responsible.
Answered September 20, 2013 by Anonymous