How to Change Homeowner Insurance From Owner-Occupied to Non-Owner Occupied

If you own a home, condominium or townhouse that you plan to use as an investment property, you'll need to purchase a new homeowner's insurance policy first. Policies for owner-occupied and non-owner occupied buildings vary because of the different needs and liabilities associated with each type of dwelling. Before you rent your current home to someone else, you'll need to contact your insurance carrier to change your homeowner's policy.

Contact your insurance company or agent to discuss changing your owner-occupied homeowner's insurance policy to a non-owner occupied, or landlord policy. Typically, these policies are more expensive because insurers don't expect renters to treat a property as kindly as a homeowner would. However, if you expect the property to remain occupied on a consistent basis, some insurers will be willing to lower the yearly premium. This is because an occupied dwelling is at less risk of significant damage. Raising your deductible can also help lower the cost of your yearly premiums, though you'll want to think carefully before raising them too much. In the event of a claim, a high deductible could mean significant out-of-pocket expenses.

Discuss add-on benefits of non-owner occupied policies that may be applicable to you now that you're renting out your home. For example, many insurance companies offer loss of rental income coverage and coverage for legal defense and court costs.

Ask for an insurance quote for the property. Because of the increased liability of having another family living in your home, your carrier may suggest that you obtain a higher level or coverage than you previously had. If you have questions or concerns about how much insurance you should purchase, speak to your attorney.

Shop around if you're dissatisfied with the non-owner occupied insurance quote you obtained from your present insurer. If you find a lower quote elsewhere, your present insurer may match the quote. Otherwise, you can consider moving your policy to a new insurer.