Do You Need Home Insurance If You're Living in a Family Member's Home Long-term?

Living with family can be a great way to save money for yourself and your relatives. However, understanding which type of property insurance you need can get tricky. Let’s start with the basics of home insurance.

What does home insurance cover?

To get an idea of when you’ll need to purchase insurance, you must first understand what homeowners insurance covers. While policies differ, homeowners insurance generally protects against:

  • Damage to the physical structure of the house
  • Damage to the insured’s personal property within the house
  • Injuries suffered by other people while on the property

This may seem obvious, but homeowners insurance covers the owner of the home. If your name isn’t on the deed to the house, it isn’t appropriate for you to buy homeowners insurance. But what coverage is suitable? Let’s get into what kind of property insurance you might need when living in a family member’s home.

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Living together in a family member's home

As a general rule, if the owner of the home purchases homeowners insurance, the coverage extends to family members within the home. Therefore, if you live with your parents, you will likely be covered to a certain extent.

However, many homeowners insurance policies have a limit for personal property coverage. If the value of your personal property exceeds the insurance policy’s limit, you may want to consider purchasing personal property coverage to protect your belongings.

Living apart in a family member's home

Let’s say your parents move to a different part of town and let you and your family live in their old home. Do you need to purchase homeowners insurance? As explained above, homeowners insurance only covers the homeowner, and therefore, you won’t be able to buy homeowners insurance.

However, you won’t be covered by your parent’s homeowners insurance anymore. Once they move out of the house, your personal property is no longer insured. So, what can you do?

When you live in a house owned by a family member who lives elsewhere, you should buy tenant insurance. Even if you’re living in your family member’s house for free, tenant insurance is the coverage you’ll need because you’re basically in a landlord-tenant relationship, and whether you pay rent is usually irrelevant.

Purchasing tenant insurance will ensure your personal property is covered if it’s damaged or stolen, and it will also keep you protected if a visitor injures themselves on the property. Each policy is different, so it is essential to ask questions when purchasing your policy and read your insurance booklet once you secure coverage.

It’s not just where you live; it’s your home

Living situations can get complicated. Your insurance needs will vary based on whether the family member who owns the home is living with you or has moved out. In either case, you can have peace of mind by purchasing personal property coverage. Compare insurance quotes in Canada to find the coverage you need at the best possible price.