Duplexes are very popular, as they offer multiple living solutions for many different people. They are great investment properties for anyone interested in living in one half and renting out the other. Duplexes also provide great family solutions, offering the privacy of separate spaces while still being close to each other. For anyone interested in this type of home to buy or rent, it is important to understand duplex insurance, because insuring this type of property does differ slightly from insuring a single-family home.
How Duplex Insurance Functions
Insuring a duplex may sound difficult, yet it really is not hard to understand how duplex insurance works. The the named insured on the duplex insurance policy typically is the person who owns the building and is responsible for paying the premium. There are some important differences based on ownership and use of the building. Following are a few guidelines to see how an insurer views a duplex and who is actually insured:
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Single Ownership of Entire Duplex – When one person owns the entire duplex, duplex insurance covering the whole building is purchased by the homeowner. This is true even if a homeowner allows a family member or friend to live in one side. This type of arrangement normally qualifies for a standard homeowner’s insurance policy.
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Single Ownership of One Side of a Duplex – When someone owns one half of the duplex, that property is technically sold as a condominium as it is physically attached to another property owned by someone else. The owner of each half is considered a co-owner of the building. In this case, a condominium-style insurance policy must be individually purchased for each side of the duplex.
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Duplex Rental Insurance – If the owner of an entire duplex decides to rent one side, they need duplex insurance that is also rental insurance. This type of policy is considered to be a landlord and renter’s insurance policy. It protects an owner just like a normal homeowner’s policy; however, it also includes protection for specific situations that arise from renting. This type of policy covers things like damage and vandalism to the rental unit, loss of income if the unit cannot be rented due to damage, and temporary housing for tenants after a covered loss until the unit is repaired.
What About Belongings?
In a duplex situation, repair or replacement of belongings damaged by a covered loss depends upon how the loss occurred, the ownership of the entire duplex, and which side of the duplex may have been liable for the incident if other than a weather-related loss.
Single ownership duplex insurance covers the belongings of any duplex occupant up to the policy limits. When each half of a duplex is separately owned, each side would insure their own belongings on separate policies and be covered separately up to purchased policy limits. If a loss that occurred on one side of the duplex also damages items on the other side, the policy covering the side where the loss originated may be responsible for damages to the other side of the duplex, including belongings. In any rental situation, any belongings of a renter damaged in a loss would be their own responsibility and require coverage under some type of individually-purchased renter’s insurance policy.
Hopefully, this information can shed some light on duplex insurance, specifically who is covered and for under what circumstances. For more detailed information or to discuss a specific duplex ownership or rental concern, contact a local Texas insurance company for the best advice!