Owner-Occupied Buildings: Why Building Owners Might Need Renter’s Insurance

While it might sound strange for a property owner to need renter’s insurance, this is often the case for owner-occupied buildings. A number of the building owners we insure in the New York City area require renter’s insurance to protect their personal property. The scenario arises when the building itself is owned by a trust, corporation or limited liability company (LLC)—financial decisions typically recommended by attorneys and financial planners.

To avoid any unpleasant surprises in the event of a claim, we always recommend that owners discuss any changes to the property, even administrative ones, with their insurance partners.

Matching Property Deeds and Insurance Policies

When it comes to contracts, such as property ownership and insurance policies, details always matter. Any time the name on a property deed changes, the insurance policy needs to be updated to reflect the correct ownership. Otherwise, an insurance company may deny a claim. After all, the policyholder would not technically be the official owner of the building.

It’s a minor detail and very easy to handle with a call to the insurance broker.

When Building Owners Need Renter’s Insurance

The second issue that arises involves the type of insurance policy required to protect the building owners’ personal property. Simply put, do the owners occupy the building?

If the owners live in the building but another legal entity owns the property, then the owners would need a separate renter’s insurance policy to protect their personal belongings. In this situation, they reside in the building as tenants. This second policy will also provide additional protection against personal liability in a lawsuit.

Again, a conversation with a knowledgeable broker can make sure the right coverage is in place.