23 Feb Unmarried Couples Living Together – Is the Proper Insurance in Place?
This is quite possibly a more common exposure today than in past years – couples deciding to live together before getting married (or with no plans to get married). If the homeowners’ insurance was not modified, would there be coverage for the additional person if a property or liability loss occurred? There are some issues that could determine this.
First, it is important to look at the definition of an insured. It is common for this to read as follows:
“Insured” means a) you and residents of your household who are (1) your relatives or (2) other persons under the age of 21 and in the care of any person described in a. (1) of this provision.
Using this policy language, if an unmarried couple bought a home together (in both of their names), I believe most carriers would be willing to issue one policy with both names as the named insured. Thus, coverage for both parties should be in place.
But what if the home was only in the name of one of the parties? Would there be coverage for the other person? Technically, they don’t meet the definition of an insured in this case. Thus, I conclude that there would not be any coverage – no property coverage and no liability coverage. Is this an exposure that some of your clients may not be aware of?
If the additional person has substantial personal property, it would be prudent to check with the homeowners’ carrier to see whether they can be added and therefore covered. If that is not allowed, the additional person should purchase a separate renters insurance policy. This should be easily accomplished.
This is all well and good, provided that your agency is aware of this exposure and can find out the necessary details. However, is it possible you have clients with this exposure, and they have not given any thought to the insurance implications?
This may be a question to add to your new and renewal business questionnaires and checklists.