Who is covered on a homeowners policy…and who is not

Many people assume their homeowner’s insurance policy will provide protection of personal property and personal liability for anyone residing in the household. This is NOT true and could result in unpaid losses and costly defense costs for both parties if a claim occurs.

So who is covered under a homeowner’s policy? While most companies have similar definitions of who is considered to be an insured, the question one should ask is who is not covered on a homeowner’s policy.

These are just two examples of someone residing in the household where coverage would not extend:

• An unmarried significant other
• Roommates and Boarders

Example 1:

Insured’s boyfriend has a dog that accidentally gets loose and bites a child riding their bike in front of the home. Parent of the child sues homeowner for the medical bills. Insurance carrier declines coverage due to the dog belonging to the boyfriend and not the named insured. Boyfriend would be held personally liable for the medical bills, pain and suffering and would have to find a way to pay the legal defense and any settlement.

Example 2

Insured’s home catches on fire due to a covered loss and burns to the ground. A college friend who rents a room from the insured had $75,000 worth of personal property throughout the home. The policy provides coverage to rebuild the home and will replace all of the insured’s personal property.  The roommate has no coverage and must replace all of their belongings themselves.

As you can see it is extremely important to guarantee every household resident is covered correctly before a loss occurs. A renter’s insurance policy is the solution to prevent these gaps in coverage. A renter’s policy will provide coverage for the personal property and liability of the non-relative household member. These policies are affordable and give peace of mind to both parties.

If you are unsure if you are properly covered, contact our office for your free insurance review.