Live-in landlords are obligated to tell their home insurance provider that they are letting rooms
What does lodger mean?
Although both lodgers and tenants rent rather than own, the difference is that a lodger lives with their landlord but a tenant doesn’t.
Live-in landlords are obligated to tell their home insurance provider that they are letting rooms in the property. House shares like this are becoming increasingly common in the UK due to the state of the current housing market.
Insurance for lodgers in the house
Letting your spare room makes good financial sense but it’s essential to be fully aware of the terms of your home insurance, as taking on a lodger could invalidate your cover and leave you significantly out of pocket.
Before you take on a new housemate make sure that you actually have the legal right to. If you’re a homeowner with a mortgage you might need to secure the bank or lender’s permission before renting out a room. And if you’re a tenant you’ll need to get the landlord’s permission to sublet.
Make sure that you’ve done your sums on whether taking in a lodger will actually improve your finances too. Additional income from letting a room can impact your tax credits, benefits, council tax, income tax and of course home insurance.
Get to grips with lodgers insurance
As the landlord, when taking out home insurance with lodgers, you should double check the policy terms and exclusions. Generally, each party is responsible for their personal belongings, so lodgers should seek their own contents insurance. Landlords are responsible for the building as well as their own contents.
If you are taking in a lodger when you already have insurance in place then you must alert your current provider to the change in circumstances, as there may be increased risks that could affect your premium.
You should also think about the impact that new lodgers can have on your cover. For instance, what is their credit history? Do they have a guarantor? Do they have any unspent criminal convictions? It’s useful to have this information to hand when adjusting your cover, as failure to contact your insurer could invalidate your policy and leave you with a hefty bill in the event of a claim.
Home insurance with lodgers
- Up to £500,000 as standard for loss or damage to the structure of your property or permanent fixtures.
- Up to £25,000 legal expenses cover to pay for legal support for property disputes.
- Up to £200 home emergency cover per callout to temporarily fix burst pipes, roof damage and failure of water, gas and electricity supply.
- Public liability up to £5 million included.
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