Can You Insure a House You Don’t Own?

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Homeownership is a source of pride for most people. Homes are typically one of the most valuable assets in your life. Having the right insurance plan for your property is a must for any wise homeowner, especially if you live in an area prone to natural disasters.

Let’s explore the relationship between home ownership and homeowners insurance by reviewing if and when you can insure a house you don’t own or a house in someone else’s name.

Can You Insure a House You Don’t Own?

No, you typically can’t insure a house you don’t own. Insurance companies verify that you have an insurable interest in a property, which typically means you own the home. If you have a good, unique reason to insure a house that is not in your name, you’ll need to consult an agent or insurer directly.

When getting home insurance quotes, the agent or company will assume you’re the homeowner. They do this for obvious reasons. Taking out insurance policies on a home you don’t own would lead to fraud and manipulation. Plus, you’d need the property owner’s consent to insure their property, which would make no sense for them to give you.

You usually need justifiable reasons to take out an insurance policy, such as rights through a deed or legal ownership of the house you want to insure, or you’re seeking financial protection from liability.

Companies can verify that you own a home you want to insure during underwriting. They have access to CLUE reports, which list previous property claims. And, they also consult public records and third-party data providers like LexisNexis for property information and more. These will indicate who owns the property you want to cover.

When Can You Insure Someone Else’s House?

The only time you can insure a house in someone else’s name is when you have a verifiable insurable interest in the property, and your insurer allows you to do so. This rarely occurs, but you may try to insure a home you don’t own when:

  1. The house is in probate
  2. The house is owned by a trust or limited liability company

The first step to insuring a house you don’t own would be to prove you have an insurable interest in the property through other means commonly given through a deed or title. One situation this can come about is when a family member owns a house.

1. When a House Is in Probate

Suppose a house is in probate after a family member dies. In that case, you may be able to transfer the home insurance policy from the deceased policyholder to yourself if you’re going to live in the house or if you’re a surviving spouse. The insurance company will want a death certificate either way, usually within a month of the policyholder’s passing. 

After a policyholder dies, the beneficiary to the property will likely need to keep paying premiums, so they should be able to get the policy put in their name. You’ll need to keep up with the policy while you’re working on transferring the property to yourself. Keep your insurer in the loop on policy changes you want to make and the status of the property.

Several companies also offer short-term probate home insurance, although it’s likely more expensive than traditional home insurance. Also, if a house will be sitting vacant for a long time like, if it’s in probate for months or if you’re going to sell it, you’ll need vacant home insurance.

If you’re inheriting a home, the insurance from the previous owner doesn’t automatically transfer to you. You’ll need to get a new policy in your name. Home insurance can’t transfer from one person to another because many personal factors about a policyholder, like credit score and claims history, factor into premiums.

2. When a House Is Owned by an LLC

Not every insurance company will insure a house owned by a trust or LLC. A major point of concern is liability, especially when it comes to a house owned by a company. Business activity or other use of a house can blur the lines between personal home insurance and commercial property insurance in a company-owned home. Your home insurance carrier won’t want employees or customers in and around the property.

If you want to insure a house your family member currently owns, you should try to get added to the house deed or title first. You can name other people on the deed as co-applicants so they can be joint policyholders.

Also, technically, getting renters insurance is a way to get coverage on a property you don’t own. Renters insurance focuses on tenant contents and liability while excluding protection for the structure of the house you rent. 

Can Homeowners Insurance Be In Someone Else Name?

No, typically, homeowners insurance can’t be in someone else’s name. When you’re getting a quote online, the quoting engine will assume the person getting a quote is the person seeking coverage. It won’t let you put someone else’s name down for a policy.

When you get a quote, the insurance company will check that the person who wants the coverage is also the property owner. You wouldn’t be able to get a policy for someone else because you would lack insurable interest, leaving room for potential fraud. 

Most policies also indicate that a named insured needs to be living at the insured property, and they often define “insured property” as parts of the residence owned by the insured. Getting homeowners insurance in someone else’s name would violate these terms of a plan.

Also, many personal factors about a policyholder affect home insurance rates. You can’t get a policy in someone else’s name because the insurance company needs to know pertinent information about who is getting the insurance, like their credit score and claims history, so they need to apply for coverage themselves. 

You also need to submit a lot of personal information when getting quotes, like your social security number, property history, claims history, and more. It’s very unlikely that someone would know all this information about yourself and your property unless you gave it all to them. It would probably be easier just to get the quote yourself.

It's Time to Switch Your Homeowners Insurance

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The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

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