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Home insurance with lodgers – are there any differences?

Thinking about renting out your spare room to earn some extra cash? It’s worth knowing that there are implications for your buildings and contents insurance.

If you have a lodger, you may need to update your home insurance or even switch providers. Here’s what you need to know.

Thinking about renting out your spare room to earn some extra cash? It’s worth knowing that there are implications for your buildings and contents insurance.

If you have a lodger, you may need to update your home insurance or even switch providers. Here’s what you need to know.

Written by
Anna McEntee
Home, pet and travel insurance expert
Reviewed by
Rachel Lacey
Insurance and money expert
Last Updated
6 min read
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Can you legally rent out a room?

Whether you can legally have a lodger depends on your living arrangements.

  • If you own your home, there’s no reason you can’t rent out a spare room.
  • If you’re a tenant, you’ll need to check your tenancy agreement and may need to ask your landlord.
  • If you’re a leaseholder, check the terms of your lease. You might need permission from the freeholder.

Always stay within the boundaries of what’s permitted. If you’re not legally allowed a lodger, your insurance provider might not pay out for a claim – even if you have the right cover in place.

What’s the difference between a lodger and a tenant?

A lodger lives in your home and shares the accommodation and facilities. If you don't live in the property, the person renting is a tenant. Tenants and lodgers have different statuses in law, so you need to be clear what the situation is.

If the renter has their own front door or only shares a hallway – as they live in an annex, for example – they’re considered a tenant. That could mean you need landlord insurance.

Why does having a lodger affect your home insurance?

Generally, insurance providers consider lodgers to be an extra risk. It’s another person with a key to your home, who you might not know much about. It’s possible they could be careless, cause malicious damage or even steal from you.

Getting home insurance to take in a lodger doesn’t mean taking out a separate policy. It means adapting your current policy to take the extra risk into account.

Some providers might not cover you if you have a lodger, so you may need to switch home insurance providers. You may be charged a fee for cancelling your existing policy early.

What’s the impact of a lodger on home insurance?

It depends on your home insurance provider. If you get a lodger, you need to tell your provider. If you don’t tell them, you could find your policy is invalid when you come to claim.

If your insurance provider agrees to cover you, they may:

  • Ask you to take out extra liability insurance to cover you if your lodger injures themselves in your home and takes legal action.
  • Add exclusions to your home insurance, for example, you might not be covered for theft if there’s no sign of a break-in.
  • Increase your premium to take into account the extra risk.

It’s possible your insurance provider might refuse to cover you as they may consider having a lodger too big a risk. However, it’s perfectly possible to get home insurance with a lodger.

So, if your insurance provider refuses to cover you with a lodger, or charges more than you can afford, don’t worry. Compare home insurance to see if you can find an alternative.

Who else needs to know you have a lodger – and why?

  • Your mortgage provider needs to know about any lodgers or you risk breaching your mortgage contract.
  • Your local authority needs to know if you have a lodger because it could affect your council tax.
  • You may need to fill in a tax return – the government’s Rent a Room scheme lets you earn up to £7,500 per year in rent (or £3,750 if you’re jointly letting a room) without paying tax. If you earn more than that in rent, you’ll need to fill in a tax return and send it to HMRC.
  • It might affect your benefits – if you receive any, check if taking in a lodger has any financial implications

You can find out more about your responsibilities when taking in a lodger in the government’s guide to Letting rooms in your home: a guide for resident landlords

What else do I need to consider when it comes to lodger insurance?

Check whether your insurance will pay for alternative accommodation for you and your lodger if a fire or flood leaves your home uninhabitable.

Get home insurance with a lodger

If you’re considering taking in a lodger, search insurance providers to find the right home insurance for you.

Author image Anna McEntee

What our expert says...

“If you’re a homeowner or a landlord, check with your mortgage lender to see if you’re allowed to rent out rooms under the terms of your agreement. If you’re renting, you may need to ask your landlord’s permission first.

You’ll also need to tell your home insurance provider, as your policy may become invalid if you’ve not declared that you have a lodger and need to make a claim.”

- Anna McEntee, Home, pet and travel insurance expert

Frequently asked questions

Does my insurance cover my tenant’s possessions?

Your contents insurance covers only your possessions, unless otherwise specified. That means your lodger will need to take out their own contents insurance to cover their belongings.

Can I claim on my insurance if my lodger steals from me?

Some insurance providers will change your policy if you have a lodger so they don’t need to pay out on this kind of claim. Or they might add an exclusion in cases where there’s no sign of a break-in.

This may not be the case with other policies, though, so check with your provider.

Will my home insurance cover more than one lodger?

Whether or not your insurance will cover more than one lodger depends on the policy. Check yours carefully or get in touch with your insurance provider if you’re unsure.

If you’re taking in more than two lodgers (who aren’t a family), your home may be classified as an HMO (house in multiple occupation). This means it needs to meet higher safety standards.

Find out more about HMOs on the government’s website.

Can I claim if a lodger doesn’t pay their rent?

Home insurance covers your home and possessions, not your rental income. Some landlord insurance policies have a rent guarantee clause, but these are usually aimed at landlords with tenants, rather than lodgers.

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Anna McEntee - Insurance expert

Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.

Learn more about Anna

Rachel Lacey - Insurance and money expert

Rachel’s a self-confessed money nerd who’s been writing about personal finance for more than 20 years. She spent 17 years writing for Moneywise, including a few years as Editor, and likes making complicated subjects like insurance, pensions, investing and tax, easy for people to understand.

Learn more about Rachel

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