How does renting out a room affect my homeowner’s policy?

Renting out a room in your house may affect your homeowner’s policy or require additional coverage. Here are a few things you should consider, and speak with an agent about.

Maximum roommates allowed

Typical homeowner’s insurance policies will allow you to have a two to three roommates or boarders without additional coverage. However, if you have a large space and are renting to four or five tenants, you’ll want to speak with an agent about your situation. It may be necessary to restructure your policy or to consider a commercial insurance policy.

Personal liability

Personal liability coverage will protect you against being sued in the case of injury or death. Standard policies usually provide $1 million in coverage. If you are renting to more than one person, look over the personal liability and medical expenses portion of your homeowner’s policy with an agent and consider increasing these limits.

Loss of use

If something happens to your home and you are no longer able to rent out your rooms, such as in the case of a fire or structural damage, you will be breaking your lease with the tenant as a result. This could result in legal action or having to pay to put your tenant up in a hotel. Speak with an agent to clarify your coverage under different scenarios.

Renter’s insurance

Your homeowner’s policy will cover your dwelling and personal belongings in the case of something like theft or fire. However, your policy may not cover the property of your tenant, requiring them to purchase their own renter’s insurance to protect their belongings.

Some experts suggest making this a requirement. You want tenants who are able to take care of claims against them if they are found to be negligent in an accident that happens in your home, rather than relying on your own policy.

To find out what your own needs are and to choose a policy that’s right for you, speak with an agent at John B. Wright Insurance.