Home Insurance Q & A For Duplex Owners
Duplex ownership affects your home insurance differently than owning a single-family home. The following questions and answers can help you better understand the types of policies available so you can make sure you get the best insurance products for your specific situation. For further assistance or information, contact local professionals, such as those from John C. Beckett & Associates Inc.
How Much Do You Own?
Since duplexes are two homes in a single building, it's possible to only buy one unit or to own both. You only need to insure the half that you own if you don't purchase the entire duplex. If you purchase the entire building, with the plan of renting out the other half, you will need coverage for both halves.
What Is Covered for One-Sided Ownership?
For those that only own half the duplex, half the overall building value is covered. This means that replacement cost, such as in the event of the fire, only covers the square footage of one side of the property. The insurance will also provide contents, detached buildings (such as garages), and accidents in the same way as a traditional single-family dwelling policy. You may also need to purchase extra flood coverage, depending on the location of your home.
Are Rental Sides Covered Differently?
If you purchase the entire building and rent out one unit, you will have a basic duplex homeowner policy, as detailed above, for the half you live in. The other half will have a landlord policy in place. This means the entire building value is covered for replacement, but there isn't contents coverage for the rental half. You also usually have personal liability coverage, in the event a tenant sues the landlord. Occasionally an insurance agent may write a personal homeowner's policy for the entire property, instead of a landlord policy for half, but contents are still only covered in the half where the property owner lives.
If you purchase with the intent of renting out both halves, you will have a landlord policy that covers the entire building for replacement and provides for personal liability, but there will not be contents coverage or any other coverage that is commonly available in personal home insurance policies.
Should Renter's Carry Insurance
It's a good idea to require any tenants to carry basic renter's insurance. These policies are inexpensive and they cover the contents of the unit in the event of a fire, flood, or other accident. Many policies may also provide personal liability coverage, which covers any damage incurred by the renter, such as holes in walls or broken windows. These policies don't just protect the tenants, they can also protect the property owner to some extent.