How The Occupancy Of Your Home Affects Insurance Rates
Posted on: 19 April 2019
The occupancy of your house will affect the rates you pay for homeowner's insurance coverage, and this is primarily because the risks change as occupancy changes. There are several different types of occupancy that will affect your rates, and here are several different things you should understand.
Owner-occupied
The best type of occupancy in terms of homeowner's insurance is owner-occupied. A house that is owner-occupied is a house where the owner of the house lives in the house. When the owner lives in the house, it is often the best scenario in terms of home insurance rates, as insurance companies view this as the least risk for the occupancy of a house. One of the main reasons for this is because a homeowner tends to care more for a house that he or she lives in compared to other types of occupancy statuses.
Renting out your house to someone
The second type of occupancy involves renting your house to someone, and this even includes renting out a room in your house to a tenant. When you change from living in the house you own to renting the house out to a tenant, your risk level changes instantly in terms of home insurance. The main reason for this is due to the fact that the insurance company cannot evaluate the person that you are renting to. They can only evaluate you, and this leaves some questions for the insurance company. To compensate, they will often charge higher rates for homes that have renters living in them rather than owners of the homes.
Leaving your house vacant
Finally, if you decide to leave your house for 60 days or longer, or if you move out completely with no plans of coming back, your house will be considered vacant. A vacant house is categorized as the highest type of risk, in terms of occupancy, as there are many risks with vacant homes. Some of the risks include vandalism, water damage, and pest infestation. You will pay the highest rates for a house if the house is vacant or unoccupied due to the increased risks that are present with vacant homes.
Understanding the effects occupancy has on your home insurance rates is important if you plan on moving out of the house and renting it or leaving it vacant. If you have questions about this, call a home insurance agent like those at Bishop Insurance Agency in your city.
Share