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

A multi-generational family in the kitchen preparing dinner.

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

What does homeowner's insurance cover?

To get an idea of when you'll need to purchase insurance, you first need to understand what homeowner's insurance covers. While policies differ, homeowner's insurance generally covers:

  • 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 homeowner's 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 homeowner's insurance. But what coverage is appropriate? Let's get into what kind of property insurance you might need when living in a family member's home.

Find Home Insurance

Compare home insurance quotes from 30+ providers in one simple step. Start saving today!

Living Together

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

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

Living Apart in a Home Owned by a Family Member

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 homeowner's insurance? As explained above, the homeowner's insurance only covers the owner of the home. Therefore, you won't be able to purchase homeowner's insurance.

However, you won't be covered by your parents' homeowner's insurance anymore. Once they move out of the house, your personal property is no longer insured. What can you do?

When you are living in a house owned by a family member who lives elsewhere, you should buy tenant's insurance. Even if you're living in your family member's house for free, tenant's insurance is the coverage you'll need because you’re basically in a landlord-tenant relationship. Whether or not you pay rent is usually irrelevant.

Purchasing tenant's insurance will ensure your personal property is covered if it's damaged or stolen. It will also keep you protected in case a visitor injures themselves on the property.

Each policy is different, so asking a lot of question when purchasing your policy and reading your insurance booklet once coverage is secured is essential.

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. Find the best insurance in Canada to fit your needs at the best possible price.