If you have a spare room in your home, you may have considered taking in a lodger. Under the Rent a Room scheme, the government grants tax concessions to homeowners and others who let a spare room in their homes to a lodger. So you could enjoy an extra, tax-free income (up to set limits).
Here, we discuss what you need to know about having a lodger, including the need for lodger insurance.
If you decide to take in a lodger, you effectively become a live-in landlord. Indeed, the principal distinction between a lodger and a tenant is that the former shares much of the accommodation (bathroom, kitchen and often the sitting room) with a live-in landlord, whilst a tenant typically occupies self-contained accommodation.
Insurance is needed whether you receive rent from either tenants or lodgers, but there may be specific risks associated with a lodger sharing your own home, including the following:
This is where lodger insurance comes in, to cover the extra risks of having someone living in your home.
The unique nature of the risks associated with a lodger living with you means that other forms of home insurance are unlikely to be sufficient or appropriate.
If you are yourself a tenant – and have gained the permission of your landlord – you, too, might take advantage of the Rent a Room scheme. In that case, you might be even less familiar with the scope of or need for property insurance and live-in landlord liability cover. Yet the same risks remain when you have someone lodging with you.
Whether you are a homeowner or tenant, and are sharing your home with one or more lodgers, you might want to give serious consideration to your need for live-in landlord insurance (also known as lodger insurance).
If you are considering having a lodger, legally, there are a few things you need to check first.
Different home insurers may have different approaches when it comes to covering a lodger.
Typically, yes. Your lodger home and contents cover will generally only provide cover for your buildings, contents and any liability issues. Your lodger may need to buy their own contents insurance to ensure that their possessions are covered.
Other things to consider:
Any kind of property insurance is important. The complexities are compounded by the fact that there are so many different variations, with each type of insurance specialising in the particular protection you need when living alone in your home, letting your property to tenants or taking a lodger into your own home.
Get to Know Us