Adding A Mother-In-Law Suite? 5 Things To Know About Home Insurance
Are you adding a mother-in-law suite to your primary home? More and more American families are providing safe and cost-effective housing for elderly parents and other family members at home. But how will this addition affect your home insurance? Here are a few things to know.
1. Home Insurance Often Extends. If the suite is attached to your home, it becomes part of the primary home as far as most homeowners insurance is concerned. This is good news for you because it means you may not need separate policies, depending on a few other factors.
2. Your Limits Are Affected. One area you will need to address is how the addition changes the value of what's covered. It likely increases the value of the house as well as its replacement cost, so you may need to increase limits. And with the addition of new furnishings and appliances under your insurance umbrella, individual and overall personal property limits might also now be insufficiently low.
3. Renters Aren't the Same. The extension of homeowners coverage to an attached or unattached dwelling applies to relatives and those to whom you're legally bound. However, if you rent out the unit to others now or in the future, you may need a separate business insurance package. In fact, a self-sufficient in-law suite with separate entrances might stray too far into rental territory for home insurance.
4. They May Need Renters Coverage. Even if you're hosting a family member, they may want to look into renters insurance. Why? Your home insurance policy likely covers your home and its outbuildings — particularly if you aren't charging rent — but it may not cover their personal belongings. Renters insurance is cost-effective and provides them added peace of mind.
5. You Can Separate Coverage. Of course, just because your home insurance is likely to cover an additional living unit doesn't mean this is your only choice. You may opt to separate these with different, more targeted coverage. For instance, you might add a rider or increase coverage specifically for the additional dwelling portion of the policy. You might also purchase separate fire or flood policies for the unit so as to limit risk of premiums rising on your main home policy.
Want to know more about what your specific home insurance policy will cover as you add an in-law suite? Need help shopping for the most appropriate additional policies for your circumstances? Start by meeting with an experienced insurance agent in your state today.