If your or your spouse’s parents moved in, you may have been so focused on the new living arrangement that you didn’t think about insurance. Your homeowners insurance may no longer be adequate.
Is the In-Law Apartment Part of Your Home?
If your parents are living in a suite that’s part of your house, or if you converted the basement or attic into a bedroom, they will likely be covered under your homeowners policy because they are related to you by blood or law. If the house gets damaged or destroyed by a covered peril, your parents’ personal property, such as furniture, clothing and electronics should be covered, just like property that belongs to other members of your family.
You may not have enough coverage, though. When you took out your homeowners policy, you selected coverage limits based on the value of the property that your nuclear family owned. Now that your parents are living with you, that limit may not be high enough to cover everyone’s possessions. You may have to raise your coverage limit or add endorsements if your parents have valuables, such as jewelry, that your standard policy won’t fully cover.
Is the In-Law Apartment Separate From Your House?
If your parents are living in another building on your property that you built or converted, or if you divided your single-family house and made it into a multi-family home, your parents may not be included in your homeowners insurance policy’s coverage. It will depend on the specific setup. The insurance company may consider factors such as whether your parents have a separate entrance, their own utilities and a different address than you have.
If the in-law apartment is a separate unit, your parents may have to take out a renters insurance policy, even if they don’t pay money to live with you. That will protect their possessions, provide them with liability coverage and protect you if a parent is responsible for an accident that causes property damage or injuries.
Do You Have Enough Dwelling Coverage?
Your homeowners insurance includes dwelling coverage that will pay to rebuild your house if it’s destroyed by a covered peril. The amount of coverage you selected may have been sufficient when you took out the policy, but it may no longer be enough if you built an addition or made other changes that raised your home’s value.
If you constructed or converted another structure on the property to serve as an in-law residence, you may need to reevaluate your insurance coverage. The amount of coverage that applies to other structures is generally a percentage of the total dwelling coverage limit. That percentage may not be enough to rebuild a small house that you built for your parents.
Talk to Your Agent
When it comes to insurance, numerous factors can come into play and rules vary from company to company. Get in touch with your insurance agent to discuss your living situation and figure out if you need to adjust your coverage.
