{"id":12907,"date":"2024-06-26T07:26:32","date_gmt":"2024-06-26T07:26:32","guid":{"rendered":"https:\/\/snapadu.com\/?p=12907"},"modified":"2024-06-26T07:33:22","modified_gmt":"2024-06-26T07:33:22","slug":"adu-insurance-in-california-understanding-options","status":"publish","type":"post","link":"https:\/\/snapadu.com\/blog\/adu-insurance-in-california-understanding-options\/","title":{"rendered":"ADU Insurance in California: Understanding Options"},"content":{"rendered":"

When building or owning an Accessory Dwelling Unit (ADU), it’s crucial to understand the various types of insurance that can protect your investment. Each type of insurance covers different aspects of the property and its use, ensuring comprehensive protection for homeowners, tenants, and the structure itself. Here’s a breakdown of the primary insurance types relevant to ADUs, plus guidance on key questions you may be asking about insuring your ADU.<\/p>\n

Types of insurance for ADUs<\/h2>\n

Homeowner’s Insurance<\/h3>\n

While some homeowner’s policies might already cover secondary structures like sheds, ADUs need distinct additional insurance coverage.\u00a0Homeowner’s insurance can be extended to include ADUs, protecting against risks such as fire, theft, and certain types of water damage. This extended coverage can help repair or rebuild the ADU in case of covered events. It’s important to inform your insurance provider about the ADU to ensure adequate coverage (keep reading for more info on when do so and what they will need from you).<\/p>\n

Homeowners liability protection also provides liability protection, which can cover legal and medical expenses if someone is injured on your property, including the ADU. This is essential for homeowners who rent out their ADUs or have guests frequently.<\/p>\n

Landlord Insurance for ADUs<\/h3>\n

If you plan to rent out your ADU, landlord insurance is highly recommended. This policy covers the unique risks associated with rental properties, such as loss of rental income due to property damage that makes the ADU uninhabitable. Landlord insurance also covers damages caused by tenants, offering a layer of protection not typically included in standard homeowner’s insurance. It ensures that you are financially safeguarded against unforeseen tenant-related issues.<\/p>\n

Umbrella Insurance<\/h3>\n

Umbrella insurance provides additional liability coverage beyond the limits of your homeowner’s or landlord insurance. This can be particularly beneficial for ADU owners who rent out their units or have high-value properties. This type of insurance covers a wide range of liability claims, including those not covered by other policies, offering peace of mind and additional financial protection.<\/p>\n

Do I need to inform my homeowners insurance company if I’m adding an ADU to my property?<\/u><\/h2>\n

Yes, it is recommended that homeowners contact their homeowners insurance provider to understand the impact of an ADU project on their insurance.\u00a0<\/u>Standard home insurance doesn\u2019t usually cover renovations or new construction. Depending on the size and scope of your project, you should plan on adjusting coverage to make sure the new ADU is covered if it is damaged. Homeowners insurance will not pay for damage to the ADU unless the unit is directly covered by the policy.<\/u><\/p>\n

When should I let my insurance company know about my ADU?<\/h3>\n

The best time to finalize insurance for the ADU with your carrier is after you have the closed out building permit card. This card is what demonstrate compliance the ability to legally occupy the ADU. The insurance company should provide an application which will ask for items including type of construction, bedroom and bath count, square footage, roof type and other specifications.<\/p>\n

ADU Insurance Companies: Which offer insurance for ADUs?<\/h2>\n

As of June 2024, we asked clients of SnapADU which companies offered ADU insurance options. Below are those findings.<\/p>\n