Taking in a boarder can affect your home insurance
There are plenty of different reasons people might consider taking a boarder into their home. Maybe you have a young relative going to school near where you live. It could be you’re looking to offset the cost of your monthly mortgage or rent. Whatever the reason, it’s a good idea to check with your broker or home insurance provider to find out if taking in a boarder will affect your home insurance.
Let’s say your niece or nephew is coming to live with you for the school year. The majority of insurance companies include coverage for family members under a policy. But the definition of “family” can differ from company to company. At DPM Insurance Group, our brokers and CSRs are available to help you make sure your policy provides the coverage you think it does, and you don’t find out too late that your offer to assist your brother’s child make the transition to college or university leaves you exposed to liabilities if something happens.
Keep the scenario relatively the same, but that young student is the child of a close friend, not family.
You really should inform your insurance company that the number of people living in your house or apartment has changed because you have taken on a boarder.
That student’s personal property – laptop, television, clothes, or whatever else they bring while staying with you WILL NOT be covered under your homeowner’s or tenant’s policy. They will need to get their own insurance to ensure what they bring is protected in the event of a mishap.
Keep in mind though that most insurance companies provide personal property and liability coverage for a relative or dependent under the age of 25 who is living away from home to attend school, college or university. So, the student may be covered under their parents’ homeowner’s policy, and it should be easy enough for their parents check with their insurer.
What if the student gets injured?
Liability coverage is to protect you when you accidentally injure someone else or damage their property, not to protect you from injury in your own home. So, if your student is family and covered by your policy, they would not get liability coverage for bodily injury (just like your policy doesn’t cover you if you injure yourself). But if the boarder is not related to you and paying rent, and they’re injured and sue you, you would be covered for the liability in that case.
How many boarders am I allowed to have in my home?
Again, the answer to this question is going to vary from insurer to insurer, with each insurance company having its own guidelines regarding the number of boarders. Many allow a maximum of two renters who aren’t relatives. If you have more than two people staying in your home your insurance company might consider the home to be a boarding house, which would require a commercial property policy to ensure you are adequately covered.
What if I rent out my whole basement?
If there’s a separate entrance and you’re charging rent, your policy needs to be changed to cover it. A rental suite is considered a separate premises, and will need to be insured differently than your primary location, which in this case would be the main part of your house.
What if I don’t tell my insurance company and something happens?
Your insurance policy is a contract, and if you do something that’s outside of the contract specifics, you might not be covered. That’s why your best bet is always to contact your insurance broker or carrier before you decide to rent out space. It’s easy enough to find out about your coverage options before you make decisions.