Which insurance is right for you?
Usually, the answer will depend on whether you’re owning or renting. Mortgage lenders usually require borrowers to have homeowners’ coverage, and landlords may require renters’ coverage.
Renters should make sure to get a policy that protects their personal property, not just the landlord’s liability.
If you own a home and rent rooms
A homeowners’ policy makes sense if you live in the building full-time or if you have furnishings and belongings there you want to protect.
Homeowners’ policies don’t typically cover damage caused by renters, so your renters should be encouraged to purchase their own coverage.
If you don’t live in the building, you might be considered a renter yourself, meaning you might not need a standard homeowners’ policy. Different insurance providers have different guidelines. When in doubt, however, it’s best to get full coverage including dwelling coverage.
If you live in a rent-to-own space
Most often you’ll be considered a tenant until you actually purchase the home. As a tenant, you’ll need renters insurance.
Once you officially own the home you’ll have to cough up for homeowners insurance, but not until then.
If you live in a co-op or condo
These housing arrangements may have specific insurance requirements. As a general rule, however, condo owners will want a homeowners policy with dwelling coverage.
Co-op owners only own a percentage of their building, so a renters or tenant policy should suffice.