The answer depends on how the in-law apartment is situated and which insurance company you ask. An in-law apartment can be created inside the home in an attic or basement or built as an addition to the house, or it can be contained inside another structure on the property. Many in-law apartments have their own bathrooms and appliances, and some have their own entrances, separate from the main house.
Some insurance companies would consider an in-law apartment with a separate entrance and utilities as a separate dwelling. In that case the structure would be covered under the home insurance policy, but the contents would not. The occupant -- even a relative -- would have to buy renters insurance to cover personal belongings in the apartment and get liability protection.
What if you owned the furnishings in the apartment? If the apartment were considered a separate dwelling, then the insurer might put a dollar limit on how much of the furnishings your policy would cover.
Other companies don't consider the in-law apartment a separate dwelling, even if it has a separate entrance, as long as it's part of the main house. In that case the home insurance policy would cover the apartment structure as well as the contents if the occupant were a relative. Some of these companies, though, might think differently if the apartment were contained in a separate structure on the property.
Never assume what your home insurance covers. Talk to your insurance agent about the in-law apartment and what kind of coverage you need. If the insurer considers the apartment a separate dwelling, remember that whoever is living there, whether it's your grown son or elderly father-in-law, must have renters insurance to cover personal belongings.
For more, see "New homeowner insurance basics."
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