When people think about homeowner's insurance, they tend to assume that the only people who have this are the ones who own the home. It's easy to see why. It's literally in the name, and most of the time, insurance is a financial product that banks require people to buy if a person wants to have a mortgage with them. However, once in a while there will be moments where you might need to ensure a home you don't own. This is particularly true if you have a kid who just bought a house and can't make ends meet, or have a parent who's beginning to lose their financial agency. It's a part of life. Did you ever find yourself asking, “Can I insure a home I don't own?” You're not alone...
Can I Insure a Home I Don't Own?
This all depends on the insurance company. On a national and state level, there are no rules that say you cannot buy insurance on a home you don't own. There isn't a single town that bars the practice, either. However, that doesn't always mean that you can call up an insurance company and get the coverage you want to get. Some insurers will allow non-owners to get a policy while others won't. You will need to find a company that offers policies to non-owners, and explain the situation that led up to this point to them in most cases.
Why Would You Insure a House You Don't Own?
There are several reasons why a person might choose to insure a house that they don't own the deed to. The most common reasons are because you are a family member who wants to help another family out. For example, if your child has a house but can no longer afford the payments on the insurance, you might be willing to buy insurance for the home so that it remains covered. Other times, a parent who has ailing mental faculties may need their child to be the one to buy the insurance for them. In some cases, you might also be doing a “rent to own” arrangement with a homeowner. Sometimes (though rarely) this can be a reason to get coverage.
When Does It Not Make Sense to Insure a House You Don't Own?
In most cases, the truth is that getting homeowners insurance on a house you don't have a legal claim to isn't smart. It may not even be a good idea to do so, even if your heart is in the right place. Should you make a claim on the home, there may be a chance that you won't see the money. Moreover, filing the claim can bring up more problems than it would solve. Most of the time, the only person who will benefit from homeowners insurance is the person who bought the house. If you aren't sure whether or not you should ensure a place that isn't yours, it's best to talk to your insurance agent or your real estate agent. They'll know what you should do, and may be able to offer up an alternative that will be more fiscally sound for all parties involved.