Renting to own from family member, paying cash. Need protection until paid off.

  1. 104 POINTS
    Josh Stanley
    Principal Agent, Palmetto Choice Insurance Agency, Spartanburg, SC
    The answer to your question will depend on how your contract is written.
    Any time you're insuring a property, there must be a demonstrable insurable interest. In layman's terms, there must be an actual ownership stake in the property.
    Normally, for this to exist, there should be very specific terms of purchase detailed in your rent to own contract. If this is the case, most insurance carriers will allow you to take out the industry standard HO3 homeowners policy on the property.
    However, if your contract does not meet specific guidelines (which may vary by state, so check with an expert local to you), you may find you do not have an insurable interest. If this is the case, the landlord or property owner should have a dwelling fire policy to cover the structure against physical damage, and I would recommend you have an HO-4 tenant policy to cover your personal property and liability.
    Answered on February 2, 2017
  2. 616 POINTS
    Robert J Russell - Finalist for Broker of the Year 2015
    Broker Owner,, United States (Most States)
    A Rent-to-Own renter is still a renter until he owns the property. When the title to the home is transferred then he becomes the owner.

    As a renter - he/she would need to get Renters Insurance to cover contents and not the building. The owner would need to have a Fire Policy to cover the building and not the contents.
    Answered on February 11, 2017
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