Multiunit dwellings may require unique coverage, and several insurance options are available. Whether you’re a homeowner who’s renting out one-half of a two-family home or multiple living spaces, you need to be sure that your current insurance policy provides ample protection. Here, Muller Insurance clarifies what’s considered a multiunit dwelling, the typical coverage provided by a homeowner’s policy, and other types of coverage for your units.
What Is a Multiunit Dwelling?
A multiunit dwelling is defined as any building that can house more than one tenant. To qualify as a multiunit dwelling, these living quarters need to have their own bathroom, kitchen, living space, and walls that divide the units for privacy. Here are a few examples of multiunit dwellings:
- A house with separate living spaces on the upper and lower levels
- A duplex with two units connected on one side, but still private
- A home with four separate apartments that provides separate living spaces
Renting out a multiunit dwelling is a great way to generate extra income. However, it’s important to have the ideal insurance policy in place with the right coverage for your situation. A homeowner’s policy may provide ample coverage, but there are other options available.
What Does Homeowner’s Insurance Cover?
Homeowner’s insurance may be enough if you’re living in a one or two family home. A homeowner’s insurance policy typically affords basic protection against the following:
- Structural damage: If your house or any structure on your property is damaged, a basic homeowner’s policy will ease the financial burden of the repair cost.
- Private property damage: A homeowner’s policy can protect you from being liable for the damage you’ve caused to other people’s property and help protect your personal property within your house.
This form of protection often excludes some natural events, like flooding and earthquakes. Additional insurance may be needed for homes in high-risk areas. Also, special coverage may be desired if you own fine art, jewelry, or collectibles as these are often outside the scope of what basic homeowner’s insurance covers. An umbrella liability policy can also shield you from accidents or injuries someone may suffer on your property.
If you rent to multiple tenants, a landlord policy is needed. When it comes to the type of multiunit dwelling you own, one of two types of dwelling insurance may apply: tenant-occupied dwelling insurance and owner-occupied dwelling insurance. Choosing one over the other depends on your living situation, and each policy offers certain benefits:
Tenant-Occupied Dwelling Insurance
This type of coverage applies if you live in another location outside of the rental property. Tenant-occupied dwelling insurance affords protection to the building your tenants inhabit. In its most basic form, this policy covers the following:
- Coverage for keeping the property and common areas in good condition
- Loss of rent in the event the building can’t be occupied by tenants due to a covered loss
- General liability coverage if a visitor is injured on the grounds
In either case, your tenants will need to purchase a renter’s insurance policy to protect their personal belongings.
Owner-Occupied Dwelling Insurance
If the dwelling is your primary residence, owner-occupied dwelling insurance is for you. It’s a homeowner’s policy, and covers the following:
- Common areas
- Damage from inclement weather
- Smoke and fire damage
- The building’s structure
- Vandalism and theft
Discuss Your Policy with Muller Insurance Today
Find the ideal insurance for your unique needs. Muller Insurance offers homeowners and dwelling insurance policies and additional coverage to clients across NJ, NY, CT, PA, NV, and other states. Contact us today to find out which kind of insurance is right for you.