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We’re selling our house as a rent-to-own and the insurance co. told us that if we rent it out we can only get fire coverage and that the renter will have to get renter’s insurance.. But what about tornadoes, hurricanes, floods, etc.? While he’s making the payments to buy the house we still want it to be covered. Did our insurance co. misunderstand the question?

Thanks =)

3 Thoughts on Who pays insurance on a rent-to-own house? The landlord/seller or tenant/buyer?
  1. Reply
    the kid
    June 24, 2012 at 10:22 pm

    LL. Rent to own means the person is renting.

  2. Reply
    semochemist
    June 24, 2012 at 10:59 pm

    As the owner you would insure the house and NOT the contents. The renter would be responsible for renters insurance to cover their belonging inside the house.

  3. Reply
    ca_surveyor
    June 24, 2012 at 11:19 pm

    Its going to depend on what you write into your contract.

    In a rent-to-own you are, as the agent said, a landlord. That means that your coverage will be reduced to the structure and liability. Coverage generally includes fire and other natural issues that would be included under a owners policy except for contents and perhaps issues relating to relocation expenses. You pay for that policy to protect your investment (the house).

    Your tenant (because that is what he is until he exercises the option to buy the house) must obtain coverage for his possessions and you would be wise to require him to provide you liability coverage in case they do something catastrophic (more coverage is always better – especially if you do not have to pay for it.). For this you need to talk to your agent and see what the tenant should provide.

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