FRIDAY, NOVEMBER 13, 2020
Purchasing a new home is a big deal no matter the type and style. For some people, buying a duplex is ideal. It allows an opportunity to not only have a home to live in, but also to obtain rental income from other parties. A duplex, which generally includes a second living area for another family, needs home insurance. However, the type and amount of coverage here is a bit different than a traditional home insurance policy. 
Who Will Use the Property?
One of the first questions a home insurance agent will ask is about living arrangements. Will you live at the home? Will you rent out the home? If you plan to buy a duplex and live in it alone, without renting out the other side, the coverage may resemble that of traditional home insurance. On the other hand, if you plan to rent out one or both sides, the insurance requirements change. You may need to purchase rental property coverage. It helps protect the property owner from damages in spaces rented to others.
Liability Risks
Liability insurance for a duplex may also be a bit different. The insurance needs to match the risks present. When an owner lives in his or her home, that owner generally takes care of the property. As a result, he or she is less likely to create dangerous situations.
Rental properties are not the same. Liability risks are often higher here. They are also higher because these structures have more people present on them. This increases risks, too. Therefore, you'll need to update your insurance to include liability insurance for landlords. Furthermore, you'll need to require your renter to carry their own liability insurance.
Choosing the Right Policy
Your insurance agent will work closely with you to choose the right type of coverage for your duplex. This may include some coverage for the investment property. The amount should match the value of the property. It should cover the contents of your component of the property, too. And, if you do decide to rent out the other side, you should encourage that party to obtain renters insurance to protect their contents.
It is very important to be upfront and clear with your agent about your home. Specifically, be sure to clarify whether you rent out a portion of it. This changes the type and risk level of the home. If the agent finds out you rented it without disclosure, a claim denial is likely. Some organizations may also decide to cancel the policy as a result.
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