Does Your Homeowners Insurance Apply If You Rent Your Home Out
Whether you rent a room out, allow short-term rentals of your home, or rent your entire property out under a long-term lease, you need to be aware of the effects on your home insurance policy. Your policy may give you limited coverage, but your insurance won’t apply to all situations. When you read your policy to see if you’d be covered, here are some of the things you should look for.
Roommate vs. Exclusive Use
Many home insurance policies are going to be friendlier to you renting a roommate one of your bedrooms while you still live in the home than they would be if you rented the entire place out. That’s because the home is still your primary residence.
However, you may want to look carefully into your liability protection, depending on your relationship to the renter. The liability portion of your home insurance may not apply to a member of your household — even if they’re a renter.
Excessive Short-Term Rentals
Some home insurance policies will place a limit on how much time your home can be rented out. This could be a set number of days or the number of times you can have a renter. If you go beyond that, your rentals may turn into a business activity instead of an occasional, allowed use of your home. In that case, you’d need to purchase a separate business policy.
Even if your policy does allow limited rentals and you’re under the limit, check to see if you need to notify your insurance company or carry any type of supplemental insurance.
If you sign a long-term lease on your home, you’ll almost always need a landlord policy. Depending on the options you choose, the policy may cover damage to your home’s structure, damage or theft of any appliances or other personal property you leave for the tenant and your potential liability to the tenant. The tenant would usually need to purchase their own renters insurance rather than relying on your home insurance to cover them.