Do I need house insurance for a lodger?

Do I Need Home Insurance if I Have a Lodger?

Caeva O'Callaghan | May 12th, 2020

A lodger is different from a tenant, but not all guests are lodgers. Confused? Let us straighten it out. You may need to change your home insurance if you take on a lodger.

Yes – you need to tell your house insurance company that you have lodgers and how many you have staying. Once they’re under your roof and living in your home, their belongings deserve the same protection as your own.

Taking on a lodger can be a great way to earn a bit of extra cash if you’ve got a spare room. But you probably don’t need landlord’s insurance if you have a lodger staying in your home.

In this article, we’ll answer questions like:

  • How do I insure a lodger in my home?
  • Are paying guests covered under my home insurance?
  • Will my visitors be able to claim on my home insurance?

It’s important to clarify this with your home insurance provider. Some (like Axa and Aviva) will exclude theft cover if you have lodgers or paying guests in your home. And some – like Allianz – don’t mind at all.

Lodgers vs tenants

Before we start, we need to state what the words “lodger” and “tenant” actually mean.

The main difference between a lodger and tenant is that a lodger (legally called a ‘licensee’) is someone who lives in the same property as you.

On the other hand, tenants pay rent for a property you own but don’t live in. For example, if you rent out your second home, the people in it are tenants not lodgers. In this case, you would be a live-out landlord.

If you don’t live in the same property as those who pay you to stay there, you may need landlord’s insurance. This is a lot like standard home insurance, but with some key differences. At its most basic, landlord’s insurance will protect your actual property against damage from hazards like fire or floods. You may not need contents insurance, as – unless you are letting your property out as furnished – everything not nailed down will belong to the tenant. Kitchens and bathrooms, doors and windows and floors all count as buildings.

However, if you include furniture or appliances in your property let, you’ll need contents insurance to protect your investment.

Beyond this, landlord’s insurance may include additional features like key protection, loss of rent insurance, legal expenses and home emergency cover. You can usually buy these add-ons as extras.

Lodgers in your home

Under Irish law, if a lodger who rents a room in their landlord’s home has very different rights than a tenant who lives in a separate property the landlord owns. Lodgers are not protected under the Residential Tenancies Act, which helps protect tenants’ rights.

Under the Residential Tenancies Act, a person is a tenant only if they have sole access to the property and the right to enter. If you have a granny flat you’re letting out, even if the flat is technically part of your house this will apply if the flat has its own kitchen and bathroom facilities and has its own access points. Basically, if you could live your life as normal and go three months without seeing each other, you have a tenant and not a lodger.

But if your lodger is in your spare room and needs access to your facilities, the law will consider them a ‘licensee’. As they accepted an invitation into your home, they’re not entitled to protection under the Residential Tenancies Act.

This has implications on the lodger and landlord. For example, the law doesn’t require you to keep the accommodation to a minimum physical standard, and the landlord is under no obligation to register the tenancy with the Residential Tenancies board.

Other issues

Even if you have a lodger and not a tenant, you do need to tell your home insurance. This is because many providers exclude theft cover if you have a lodger. However, many don’t. For example, with Allianz, if you permanently occupy the buildings as your main residence, up to 6 paying guests are covered automatically and cover can be extended for up to 12 paying guests. If you don’t tell your insurance about your lodger, your cover may be invalidated.

Also, you need to be aware that your own contents insurance won’t cover your lodger. They should look into taking out their own contents policy, if they don’t already have one.

You don’t need landlord’s insurance or to worry yourself about lodgers if you have visitors. Even if they stay for a few days or weeks, they count as temporary visitors to your home. This rule applies even if they give you a bottle of wine or some money for your trouble.

Finally, public liability insurance is automatically included. If your lodger injures themselves while in your home, they are in a position to take legal action. The good news is, you’ll be protected.