Dwelling or Homeowners Insurance – How To Determine The Right Type of Policy
Tuesday, March 30th, 2010 | Personal Lines
March 30, 2010 – Whether you need a dwelling policy, or homeowners insurance depends mainly on if you consider the home you want to insure is your primary residence. The insurance industry describes a primary residence as a residence that you reside in for the majority of the year. For some insurance companies this is as simple as saying what ever property you live in for at least 6 months and a day is considered a primary residence. We can also assume in confidence that your primary home will contain most if not all your personal possessions. A homeowners policy provides standard insurance mainly for your personal property, as well as for the dwelling and even personal liability. There is also various other coverage’s and options of coverage that is included in a homeowners policy, but I’ll save those details for another article.
So what if you don’t live in the home and either rent it out as an investment, or consider it a vacation home 3 months out of the year? Let’s start with the first one- investment property. Any investment property that you rent out should only require coverage for the dwelling and liability. A dwelling policy fits this situation perfectly because you don’t need to insure your personal property since it is not located at this building. However, if you have some personal items at the property you can add additional coverage to a dwelling policy to cover it, but for the most part a dwelling policy provides insurance for the building itself and if available- liability. The bottom line is with a standard dwelling policy you are only paying for coverage you need. If additional insurance is necessary beyond the dwelling itself, such as liability or even a small amount of personal property coverage you can add it to the dwelling policy.
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