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Hi..I'll be brief. 10 years ago I purchased a 3 unit building that had a another building on the property that the previous owner converted to an apartment. It was a nice conversion and had, among other things, an interior sprinkler and hard-wired smoke detectors. I purchased two separate policies from the same company for each building per my agent's suggestion. My issue is this: I'm learned recently that the owner had done all the conversion work without a permit. At best, this building is an "illegal non-conforming use" . I have explainied this to my agent who indictaed to me that in the event of a complete loss, the accessory building could not be rebuilt, which I understand. My concern is as follows: if I had a claim of loss for injuries or property loss, could an insurance company back out of coverage by stating that the unit is not proper? I have no losses to date, an d I may be a bit paranoid, but I have nearly paid off this building and have a definite insurable interest, and I just want to run a good property. I have great tenants and just want to be legitimate with my dealings. I have considered buying a supplementary renters policy naming the tenant in the outbuilding as the beneficiary, with a hgh injury liability limit, fully disclosing to the company the non-confoming nature of the building. Any thoughts or am I being nuts....thank you for reading this.

I would suggest contacting you local officials and find out what inspections could be done to be sure it is safe and complies with local ordinances. Then the insurance wouldn't be a problem.

If you live in a small town it wouldn't be to0 much trouble in clearing this up. However, if you go to the larger City Planning Department they may shut that building down and not allow any persons to live in that Apt until all inspections and permits have been completed. You may have a case against the previous owner if it was not disclosed in purchase agreement that the improvements were done without permits.