Co-ownership Insurance: Safeguard Your Home & Investment

Co-ownership can be a sweet deal, both financially and socially. But like any investment, it carries risks.

Co-ownership insurance policies help protect against many risks and provide peace of mind. Get it right, and insurance is a cost-effective tool in your wealth-maximization toolkit. But it’s essential to understand the basics if you want to see the benefits.

In the wild, many co-buyers and co-owners either ignore insurance or delegate this work to their Real Estate Agent or Loan Officer. Bad move. Why?

These service providers…

❌ Are NOT insurance experts.

❌ Are NOT co-ownership experts.

❌ Do NOT have economic interest past the purchase.

To manage the risks, minimize losses, and maximize your gains in co-ownership, be proactive.

Learn about different types of insurance policies, understand your options, and ask questions to decide what’s right for your situation.

Do co-owners need insurance?

There’s no legal requirement to take out insurance if you co-own a home with friends, relatives, or a loved one. 

Practically speaking, you may need to take out insurance policies depending on factors like whether or not you have a mortgage and how much you collectively contribute toward a down payment.

Every co-ownership situation is different--group size, goals, and circumstances. Since 2016, we’ve worked with thousands of co-buyers and co-owners. What is the average property price? Over $800k. Given what’s at stake, most co-owners we’ve worked with decide it is important to protect their home, investment, and relationships.

How co-ownership insurance works to protect your investment

The types of insurance and coverage options available depend on your circumstances.

Consider your situation and agree on which risks you want to protect against. From there, you can evaluate which insurance policies are relevant and which providers offer coverage. 

Unfortunately, there’s no one-stop shop.

• Insurance companies and brokerages cater to different needs and geographies. 
• Expect different policies' processes, cost structures, coverage, and billing cycles to vary.
• You may need to purchase different policies from separate providers.

Without a game plan, getting caught in sales funnels and going down rabbit holes is easy.
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Check out Co-ownerOS™ beta

‍Co-owning a home is complicated. With Co-ownerOS™, it’s easy.

Manage everything in one place—money matters, agreements, docs, exit strategy, and more.

Join the waitlist.

Essential insurance policies for co-ownership

Most co-owners need Title insurance and Homeowners insurance.

Why? Lenders require these policies as a condition for originating a mortgage. Over 95% of all the folks we’ve dealt with over the last 8 years financed their purchase with a mortgage.

If you finance your home purchase using a conventional mortgage and have a down payment of less than 20%, you’ll probably also need Private Mortgage Insurance (PMI) as a loan condition.

Title insurance, Homeowners insurance, and Private Mortgage insurance policies are handled during the home purchase.

There are numerous other insurance policies to consider based on your situation.

Some of the most commonly purchased policies include:

• Life insurance
• Umbrella insurance
• Personal property insurance
• Disability insurance

We've created a cheat sheet below to give you a broader list of insurance policies popular with co-owners.

Sync your insurance with your Co-ownership Agreement

Insurance is just one tool in your toolkit to protect your home, finances, and relationships.

But co-owners have access to multiple layers of protection:

1. Planning and building consensus
2. Financial instruments (e.g. insurance)
3. Legal mechanisms (e.g. Co-ownership Agreement, Memorandum of Agreement, etc.)

Want to maximize your return on investment and the likelihood of smooth sailing? Nail all three. Fortunately, they’re all related.

Whether you’re a group of 2, 3, 4, or more co-owners--getting together to consider the risks and discuss how you want to handle them is a strong start. 

The process of joint decision-making is critical to successful co-ownership. It’s also complicated because there are many moving parts. We built Co-ownerOS™ to streamline this process based on thousands of interactions with thousands of co-owners over nearly a decade. Co-ownerOS™simplifies getting on the same page and makes it easy to create, digitally sign, and execute your customized Co-ownership Agreement.

The Governance workflow in Co-ownerOS™ helps you and your co-owner(s) get firmly aligned. After you co-create, digitally sign, and execute your Co-ownership Agreement, it’s saved to your Document Vault and recorded to the blockchain.

Having built consensus across key issues, you’ll be in a strong position to understand which risks are relevant to you and where insurance makes sense.

Upload insurance policies to your Document Vault, where each co-owner can digitally sign to confirm authenticity. This way, your policies can’t be lost--ever. Digital signatures also memorialize each policy as legitimate.

Having robust documentation around your insurance policies comes in handy--when you have to make an insurance claim, renew insurance, change providers, pay taxes, request a tax refund, refinance, address legal claims, comply with an IRS audit, or sell the home.

How to manage co-ownership risks with insurance

Too often, folks decide that closing on a home is winning. Many forget that closing on a purchase is just the start of co-ownership!

It's not rocket science, but you do need to be intentional.

Here's how you can go about it:

1. Align on your circumstances
2. Identify the main risks you want to address
3. Agree on which insurance policies make sense
4. Shop and purchase policies
5. Document + manage
6. Review periodically

Pro-tips

• Get all co-owners involved in risk management.
• Do your homework on insurance options and shop around.
• Read the fine print in insurance policies before you pull the trigger.
• Document all your insurance policies, payments, claims, and communications.
• Clarify when policies come up for renewal and create an action plan.

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Be first on Co-ownerOS™ beta

‍Co-owning a home is complicated. With Co-ownerOS™, it’s easy.

Manage everything in one place—money matters, agreements, docs, exit strategy, and more.

Join the waitlist.