The renter’s insurance - Renting -Apartments, houses, lease, tenant, landlord, agreements, termination - Page 2 - City-Data Forum

Informed Info · 02-16-2014, 06:00 PM

Quote:

Originally Posted by mathjak107

As i stated so many times here the problem is many small time landlords use their homeowners insurance to cover a rental.

How does someone get away with that?

mathjak107 · 02-16-2014, 07:09 PM

its easy. the brokers let you do it all the time, many are unaware of the consequences. i only learned aboyut it because i did it and got burned,

Informed Info · 02-16-2014, 07:54 PM

Quote:

Originally Posted by mathjak107

its easy. the brokers let you do it all the time, many are unaware of the consequences. i only learned aboyut it because i did it and got burned,

So mortgage companies don't check out a document they require before closing?

Or do "brokers" fudge things to look like there is a separate policy?

Why would an insurance broker risk losing his/her license over something like this?

I've bought and sold many properties over the past 20 years, and I don't see how a bank/mortgage holder would "miss" this issue.

mathjak107 · 02-17-2014, 02:29 AM

mortgages on single family homes,co-ops and condos are usually owner occupied only unless it is a multi family dwelling. usually the folks who buy multifamily dwellings know they need landlord insurance and not just homeowners.

it is the folks with single family homes or co-op apartments that rent them later on that get caught up in using homeowners for the rental.

STT Resident · 02-17-2014, 05:11 AM

Quote:

Originally Posted by Sawdustmaker

How does someone get away with that?

I don't believe it's something a mortgage holder is interested in. If a landlord fails to insure the property to cover renters in the event of personal injury caused by failure of the LL to properly maintain the unit or the common area, he won't have an insurance company to represent him. If judgment is made against him, then he has nothing to cover the loss. If the amount is something he can't cover then a lien will be placed on the property or the property will be sold to cover the debt. The mortgage company has a first lien so has nothing to lose while the LL has everything to lose.

mathjak107 · 02-17-2014, 05:22 AM

actually the bank has a lot to lose. because if the tenant burns the place down and it is arson and the insurer will not pay because the wrong insurance was used the bank has everything to lose.

they most likely issued that mortgage based on owner occupied as well as most residential mortgages spell that out.