Owner-Occupied vs. Non-Owner-Occupied Property Insurance: A Real Estate Agent’s Guide

Owner-Occupied vs. Non-Owner-Occupied Property Insurance: A Real Estate Agent’s Guide

People buy homes for different reasons, and as a real estate agent, it’s a good idea to figure out your clients’ intentions so you can fill them in regarding their property insurance. There are several different varieties of property insurance, and not every home will qualify for each respective type. Owner-Occupied Insurance When someone is buying a home to use as their primary residence, they’ll probably want owner-occupied, a.k.a. homeowner’s insurance. This common type of insurance costs anywhere from 20% to 30% less than the others, but it requires that the owner live in the home. The rationale behind the reduced cost is that insurance companies believe that if the owner lives in the home, they’re more likely to take care of it, reducing overall risk and therefore the premium. Suppose you have a client that’s buying a second home, or they travel for long periods of time and are not often at the home. They may qualify for owner-occupied insurance, but it may be classified as a “secondary” home.  Because someone isn’t always home to take care of the property, the cost can be a bit more. Non-Owner Occupied – Landlord’s Insurance When someone is buying a home purely as an investment and their intention is to rent or lease the property, they’ll need landlord’s insurance – not homeowners insurance. Landlord’s insurance provides coverage for someone renting out a home, apartment building or condos. The policy typically covers things like fire, windstorm, falling objects, some water damage and many other perils, as well as liability protection against lawsuits. It can even cover them for the potential loss of...