Failing to handle your insurance correctly when you have a lodger could invalidate your policy or leave you underinsured.
This comprehensive guide explains how taking in a lodger affects your home insurance, what steps to take before you welcome a lodger, and aims to answer all of your frequently asked questions.
A lodger is someone who rents a room in your home while you (the homeowner) continue to live in the property. Lodgers typically share common areas like the kitchen, living room, or bathroom with you. In contrast, a tenant usually rents an entire property (or self-contained part of it) and the landlord does not reside there.
This distinction matters because tenants are covered by different laws and usually require a formal tenancy agreement (e.g. an Assured Shorthold Tenancy), whereas lodgers often only have a lodger agreement or licence with fewer rights for the lodger and more flexibility for the landlord.
From an insurance perspective, the difference is critical. If you rent out a separate flat or you move out and rent your whole home to tenants, you’d typically need a dedicated landlord insurance policy. But if you remain living in your home and take in a lodger, you generally won’t need a separate landlord insurance policy, you can instead adapt your existing home insurance to cover the new arrangement.
In summary, a lodger means you are a “resident landlord,” not an off-site landlord, which simplifies things but still requires informing your insurer (more on that below).
Before focusing on insurance, make sure nothing prevents you from taking in a lodger in the first place. If you own your home outright (no mortgage), there is usually no legal barrier to renting out a spare room. If you have a mortgage, check your mortgage agreement and inform your lender – most lenders allow lodgers, but failing to notify them could breach your loan terms.
In fact, many mortgage providers are fine with lodgers and some even count the lodger’s rent as income in affordability checks for remortgaging.
If your home is leasehold (for example, a flat), review your lease: some leases prohibit subletting or require permission from the freeholder before you take in a lodger. And if you yourself are a tenant (renting from a landlord), you typically cannot sublet to a lodger without your landlord’s explicit permission.
The bottom line is to get the necessary permissions. Always stay within what your mortgage lender, lease, or tenancy allows. If you’re not legally allowed to have a lodger and do so anyway, any related insurance claim could be denied on those grounds. Once you have the green light to proceed, you can turn attention to the insurance implications.
It is essential to inform your home insurance provider before your lodger moves in. When you purchased your home insurance, the policy was underwritten based on who lives in the home and the level of risk they present.
Adding an unrelated lodger changes that risk profile, so your insurer needs to know. If you don’t tell them about a new lodger, you risk invalidating your home insurance policy – meaning a future claim might be rejected outright because you failed to disclose a “material change” in circumstances.
In other words, keeping a lodger secret to avoid a premium increase is not worth the risk, as it could leave you with no cover when you need it most.
Most insurance companies will have a procedure for adding a lodger to your policy details. It’s usually a matter of calling them or updating your policy online to reflect an “additional occupant” or similar. Make sure to do this before the lodger moves in or as soon as possible, rather than waiting until you need to make a claim.
Bringing in a lodger introduces additional risks to your home, which is why insurers treat this situation carefully. Here are the main ways a lodger can impact your home insurance:
More people living in the home means a greater likelihood of accidental damage – spills, breakages, cooking mishaps, etc. Insurers recognise this and often adjust premiums upward accordingly. The UK government’s own guidance for resident landlords notes that insurance premiums are “very likely” to increase when someone else shares your home, due to factors like accidental damage.
A lodger will have their own keys and may not exercise the same caution as you would with home security. There’s a risk (albeit small) that a dishonest lodger could steal from you, or they might unwittingly allow an unauthorised person into your home, leading to theft.
Because of this, many insurers add exclusions to your policy once you have a lodger – for example, no cover for theft without a sign of forced entry.
This means if your lodger (or one of their guests) walks off with your valuables, an insurer might refuse that theft claim on the grounds that you willingly allowed the person into your home. Always check how your policy handles theft in lodger situations, and consider securing or removing especially valuable items as a precaution.
If a lodger or one of their visitors is injured on your property (say they trip on a loose rug or fall down the stairs), you as the homeowner could potentially be held liable. Standard home insurance liability cover may extend to such incidents, but some insurers worry about higher liability risk with paying lodgers.
As a result, your insurer might require or recommend adding extra personal liability or legal cover to protect you if the lodger gets hurt and makes a claim against you. It’s wise to have sufficient public liability coverage in your policy and to follow basic safety practices in your home (like installing smoke alarms and keeping walkways clear of hazards).
Unlike family members, a lodger is essentially a stranger when they first move in. They might invite friends over or have partners visiting. You have less control over this, which could increase risks like accidental damage or theft.
Insurers factor in this loss of control as an added risk factor. Some policies may even stipulate conditions, such as requiring you to vet the lodger (for example, no lodgers with a criminal background or certain pet breeds, etc.), although this varies by insurer.
Every insurance provider has its own approach, but if they agree to cover you with a lodger, they will typically do one or more of the following:
You will likely pay a higher premium to account for the greater risk. This might be a moderate increase, but it’s hard to predict exactly – it could depend on factors like the lodger’s background (some insurers may charge more if, say, the lodger is a student or unemployed due to perceived risk).
The UK government’s landlord guide mentions that allowing someone to share your home will very likely raise your premiums, so budget for an uptick in cost.
Insurers commonly tighten certain coverage terms once a lodger is present. A frequent example is the theft coverage exclusion discussed earlier – many policies won’t cover theft unless there are signs of forced entry when you have a lodger.
Similarly, malicious damage caused by a lodger or their guest might be excluded. Your insurer might also stipulate that no cover extends to the lodger’s own belongings (more on that below). Always read the updated policy documents so you’re aware of any new exclusions or conditions attached to your cover.
Though less common, an insurer might impose a higher excess (the amount you pay towards any claim) for certain types of claims once you have a lodger. For example, claims arising from your lodger’s actions might carry a larger excess. Check your policy schedule for any such changes.
Not all home insurance providers accommodate lodgers. A few insurers simply do not cover homes with lodgers under their standard policies. If your provider cannot cover you (or quotes an unreasonably high premium), you may need to shop around for a new policy that welcomes lodgers.
The good news is that many UK insurers do offer coverage for live-in landlords; you might find policies advertised as “lodger insurance” which are essentially home insurance tailored for households with lodgers. Take advantage of comparison tools or brokers to find an insurer that fits your needs if required.
Overall, be prepared to adapt your policy. Your insurer’s goal is to cover the new risks without taking on unexpected exposure, and your goal should be to have a policy that still fully protects you (and possibly your lodger) in the event of a claim. If anything is unclear in the new terms your insurer provides, don’t hesitate to ask questions. It’s crucial that you understand what is and isn’t covered after adding a lodger.
One important point to clarify is what the lodger’s presence means for contents insurance. Your home insurance (if it includes contents cover) will typically protect your belongings and the structure of the home, not the lodger’s personal possessions.
In fact, policies often explicitly state that the lodger’s belongings are excluded from coverage under the homeowner’s policy.
For example, if your lodger’s laptop or bicycle is stolen or damaged, your insurer will not compensate them – your contents insurance covers only your items unless specifically arranged otherwise.
This means your lodger should consider getting their own contents insurance if they want their property protected. There are renter’s contents insurance policies in the market that a lodger can purchase to cover their valuables in a furnished room.
As a live-in landlord, you might want to advise your lodger of this, so they aren’t caught off guard in case of an incident. (Some insurers offer an option to add a lodger’s possessions to your policy at an extra cost, but this is something you’d need to negotiate explicitly with the insurer, and it’s not very common.)
Additionally, if you have valuable items in the lodger’s room or shared areas, you may need to ensure those are noted on your own policy.
For instance, if you’re providing a TV or furniture in the lodger’s room, those items belong to you and should be covered by your contents insurance – just verify they’re accounted for in your sum insured. But your lodger’s clothes, electronics, or other personal items are their responsibility to insure.
Finally, keep in mind the liability aspect from the lodger’s side. If the lodger accidentally causes damage to your property (say they overflow a bath and ruin the ceiling below), your buildings insurance would typically cover the repairs to the property as long as it was accidental – but if your insurer has exclusions for lodger-related damage, you might have to claim and pay the excess, etc.
You could potentially seek reimbursement from the lodger (perhaps from their deposit). There isn’t a specific “lodger liability insurance” the lodger can buy for damage they cause to your home (that’s more relevant in tenant situations with landlord insurance), so clear communication and a good lodger agreement are key.
A written lodger agreement can outline responsibility for damages, helping avoid disputes later.
No discussion of lodgers would be complete without mentioning the UK’s Rent a Room Scheme. This government scheme is a tax relief program that allows homeowners (and even tenants, with permission) to earn up to £7,500 per year tax-free from renting out furnished accommodation in their main home.
If two people (for example, a couple) share the income from a lodger, the tax-free threshold is halved to £3,750 each.
The Rent a Room Scheme is automatic if your rental income is below the threshold – you don’t even need to do anything to claim the allowance. If you earn more than £7,500 from lodgers in a tax year, you’ll need to complete a tax return to declare that income.
At that point, you can choose to opt into the scheme (so that the first £7,500 is tax-free and you pay tax on the rest) or opt out and instead pay tax on your actual profit (rental income minus expenses) if that would be more favourable.
For most live-in landlords with one lodger, however, the income won’t exceed £7,500 a year (roughly £625 a month), so they pay no tax on it under this scheme.
Important: The Rent a Room Scheme is purely a tax benefit. It does not provide any insurance or legal cover, nor does joining the scheme have any direct effect on your home insurance obligations.
Some people mistakenly think that because their lodger’s income is below the tax threshold and “officially sanctioned” by the scheme, they might not need to inform anyone else – this is not true.
You still must tell your insurer and mortgage lender, regardless of how the rent is treated for tax purposes. The scheme doesn’t mitigate the increased risk a lodger poses; it only spares you from paying tax on the income up to the limit.
That said, knowing about the Rent a Room Scheme is crucial for financial planning. Take advantage of it if you qualify, and keep records of your lodger-related income and expenses. If your lodger’s rent will exceed £7,500 in a year, be prepared to fill out a Self Assessment tax return and possibly pay some tax.
(For more details, you can refer to official government guidance on the scheme or consult HMRC.) But remember, tax-free income doesn’t mean “no strings attached” in other areas – insurance, mortgage, and safety responsibilities still apply.
Beyond insurance and tax, having a lodger comes with a few additional responsibilities and notifications for a homeowner. To ensure everything is above board (and to protect yourself), keep these considerations in mind:
If you have a mortgage on your home, inform your lender that you plan to take in a lodger. Nearly all mortgage agreements require you to get the lender’s consent before renting out part of the property.
While consent is usually granted for lodgers (since you’re still living there), failure to notify your bank could technically put you in breach of your mortgage contract. It’s typically a formality, but one you shouldn’t overlook.
We’ve covered this in detail, but it’s worth reiterating in any checklist. Telling your insurer is mandatory. If you want to be extra cautious, get any changes in coverage confirmed in writing.
Some homeowners even shop for a new insurance policy at this stage that explicitly covers lodgers. This can sometimes be more cost-effective or provide better coverage than modifying an existing policy that isn’t lodger-friendly.
(For instance, our Home Insurance policies can be tailored for situations like having a lodger, without needing a separate landlord policy.)
Taking in a lodger may affect your Council Tax. If you previously lived alone, you were likely receiving the 25% single person discount on your Council Tax – you will lose that discount once another adult moves in, (unless your lodger qualifies as a “disregarded person” for council tax, such as a full-time student, in which case you might keep some discount).
You should contact your council to update your household details. Additionally, if your home ever qualified as a House in Multiple Occupation (HMO) due to multiple lodgers (see below), there could be council requirements or higher council tax rates, so keep the council informed.
If your lodger’s rent exceeds the Rent a Room Scheme threshold (£7,500 a year), you are required to declare this rental income on a tax return. Even if below the threshold, it’s good practice to keep records. There’s no harm in informing HMRC that you have a lodger under the scheme (though not strictly necessary if under the limit).
It demonstrates transparency and ensures you won’t have issues down the line. If you receive means-tested benefits, remember that lodger income could affect those, so check with an advisor or the relevant authority about the implications on any benefits you claim.
If you have utilities or services billed as single-occupancy (for example, some water companies have lower rates for single residents, or if you’re the only name on an electricity account), expect these to change once a lodger joins.
You may need to update utility providers about the new occupant. Often, this doesn’t drastically change anything except losing single-person discounts, but it’s worth noting so you’re not caught by surprise bills.
As a live-in landlord, you have a duty to provide a safe environment for your lodger. This includes basics like working smoke alarms on each floor, a safe supply of gas and electricity, and secure door locks.
By law, gas safety regulations that apply to landlords also apply if you’re renting to a lodger – you should have any gas appliances checked annually by a Gas Safe registered engineer and provide a gas safety record if applicable. (Even if not strictly required as with formal tenancies, it’s strongly recommended for everyone’s safety.)
Ensure that furniture you provide is fire-safe (meeting fire safety standards for furnishings). While this strays beyond insurance, it’s directly related to reducing risk: a safer home is less likely to have accidents, fires, or incidents that lead to insurance claims. In addition, having a lodger agreement in writing is highly advisable.
This document isn’t filed with any authority, but it outlines the terms of the lodging (house rules, notice periods, which areas are private, etc.) and can be invaluable in preventing or resolving disputes.
It also reinforces in writing that the lodger has a license to occupy, not a full tenancy, which helps clarify rights and responsibilities for both sides.
If you are thinking of taking in more than one lodger, be aware of the threshold at which your home might be considered a House in Multiple Occupation.
In England, if you have 3 or more lodgers living with you (forming multiple separate households), your property is likely classed as an HMO. Even having two lodgers could meet the definition of an HMO (since you + 2 lodgers = 3 households), though an owner-occupied home with up to two lodgers is generally exempt from the full HMO licensing requirements.
But once you reach a certain number of people, additional regulations kick in. For instance, with three or more lodgers you may need to apply for an HMO licence from your local council and comply with stricter safety standards (more fire precautions, possibly additional bathrooms or kitchen facilities depending on the number of occupants).
HMO status can also impact your insurance – you might need a specialised policy that covers HMOs, which tends to be more expensive.
Always check the latest local regulations if you plan to rent to multiple lodgers, and make sure your insurer knows exactly how many people live in the home.
As you can see, taking in a lodger involves more than just collecting rent. However, with proper preparation, it can be done safely and within the rules. Many homeowners successfully earn extra income this way, as long as they keep their insurer and other relevant parties informed and maintain a safe, lawful home environment.
Yes, absolutely. You must inform your home insurance company if you take in a lodger. Having a lodger is a material change in risk, and failing to disclose it could void your policy. Insurers consider lodgers an extra risk, so they will adjust your coverage or premium accordingly once informed.
If you don’t tell your insurer and later need to make a claim, you might find that your policy has been invalidated due to non-disclosure. To stay protected, always notify your insurer before the lodger moves in (or as soon as possible) and follow any instructions they give about updating your policy.
In most cases, yes, your premium is likely to increase when you take in a lodger. You’re adding more risk (another person who could accidentally damage the property or cause a claim), and insurers typically charge more for that.
The UK Government’s guide for resident landlords notes that premiums are very likely to rise if you let part of your home. How much more you’ll pay can vary – some homeowners report only a small change, while others might see a more noticeable jump if their insurer views lodgers as high risk.
Shop around if the hike seems steep. But do expect at least a moderate premium increase and budget for it. It’s the cost of ensuring you remain fully covered with a lodger in the house.
No, not usually. Standard landlord insurance is designed for landlords who don’t live at the property (for example, if you let out an entire house or flat to tenants). In the case of a lodger, you as the homeowner are still living in your home alongside them, so you can continue with a normal home insurance policy – provided the insurer knows about the lodger. You do not need to buy a separate landlord insurance policy just for one or two lodgers.
Instead, you’ll adjust your existing home insurance. Some insurers call this “home insurance with lodger cover” or similar. It’s essentially an endorsement on your home policy, not a whole new policy type.
Only if your current insurer refuses cover for lodgers would you need to seek a different home insurance that allows lodgers (or, if you plan to rent out the whole property or have multiple lodgers to the point of it being an HMO, then you’d look at landlord or specialist insurance).
For a single lodger in a home you occupy, stick with your home insurance – just make sure it’s updated for the lodger.
No. Your home insurance covers your building and your own contents, not your lodger’s personal possessions. The lodger will need to arrange their own contents insurance if they want protection for their items.
For example, if there’s a burglary or a fire, your policy would compensate you for your damaged or stolen belongings, but your lodger would not receive payout for their losses. They should consider a tenant’s contents policy tailored for people living in someone else’s home. It’s relatively affordable and can cover things like the lodger’s electronics, clothing, and other valuables.
As the homeowner, it’s a good idea to make this clear to your lodger upfront, so they understand the need for their own insurance on personal items.
It depends on the circumstances and your policy terms. If the damage is accidental, and you have accidental damage cover, you can likely claim for repairs – insurers don’t usually mind who caused the accident if it was unintended (though you’d have to pay the excess).
However, if the damage is intentional or malicious (for instance, a lodger vandalises something in anger), insurance is unlikely to cover that, as many policies exclude deliberate damage by anyone lawfully on the premises.
For theft, as noted earlier, many home insurance policies will not cover theft by a lodger or theft that occurs without forced entry. So if a lodger were to steal from you, or invite someone in who steals something, you might be out of luck with insurance – a lot of insurers put in a clause excluding theft in such scenarios.
There are some policies that might still cover it (each insurer’s stance differs), but it’s common to exclude. Always check your policy wording. The best practice is to vet your lodger carefully and secure or remove extremely valuable items, just in case.
Also, collect a reasonable security deposit from the lodger when they move in; if they do cause minor damage, you can deduct the repair cost from the deposit (this is standard procedure and should be stated in your lodger agreement).
This will depend on your particular policy and insurer. Many home insurance companies are comfortable with one lodger, and some will allow two. If you take in more than two lodgers, insurers may start to categorise your home as a higher-risk scenario (and, as mentioned, it could legally be an HMO). Always ask your insurer what their limit is. Some policies might cover two lodgers with an endorsement, but others might only permit one before requiring a different type of policy.
If you’re considering having multiple lodgers, you must check with your insurer beforehand. And remember, if you have three or more lodgers who are unrelated, your home is likely considered a House in Multiple Occupation. At that point, not only might you need a special insurance policy, but you’d also have to comply with HMO licensing and safety rules which go beyond standard lodger setups.
In summary, one lodger is straightforward for insurance, two may be okay with some insurers, and three or more will require significant changes (and probably a move to a landlord or HMO insurance product).
Not directly. The Rent a Room Scheme is a tax scheme and doesn’t change your obligations regarding insurance. There’s no home-insurance discount or special insurance coverage automatically given because you’re using the scheme.
You still have to inform your insurer about the lodger and you still might face premium increases or policy adjustments, regardless of whether your lodger’s income is tax-free under the scheme. The only intersection is that if you earn over £7,500 from your lodger and therefore file a tax return, you might need to state on the form that the income was under the Rent a Room Scheme (which is a tax matter, not insurance).
From an insurance standpoint, whether you’re below or above the tax threshold makes no difference – either way, you have a paying lodger, which the insurer needs to know about. So think of the Rent a Room Scheme as a bonus that lets you keep more of your money, but treat insurance as a separate responsibility. Always follow insurance requirements irrespective of any tax benefit.
A lodger agreement (or license) is a document that sets out the terms of the lodging arrangement. Key things to include are: the names of both parties, the address and room being rented, the start date (and end date if it’s a fixed term, or a notice period if it’s rolling), the rent amount and payment schedule, the security deposit amount (if any) and conditions for its return, and house rules or any services provided (for example, if you will provide any meals or cleaning, or if certain areas are private).
It should also state how either party can terminate the arrangement (e.g. one month’s notice in writing). From an insurance perspective, one useful clause is to specify that the lodger should obtain their own contents insurance for their belongings – this sets the expectation clearly. You might also include that they must not do anything to invalidate your home insurance (such as tampering with smoke alarms or installing extra locks without permission).
Having a signed lodger agreement helps if there are disputes and can show an insurer or any authority that you have rules in place. You can find templates for lodger agreements from reliable sources, but consider seeking legal advice if you want to be thorough. It’s about establishing a good understanding from day one.
Taking in a lodger can be a mutually beneficial arrangement – you earn extra income (potentially tax-free) and the lodger gets an affordable place to stay. By following the tips above, you can approach this arrangement with confidence and peace of mind. Always keep your insurance up to date, communicate with your lender and council, and maintain a safe home environment.
With the formalities handled properly, you’ll be free to enjoy the financial boost of a lodger without unwelcome surprises. Remember, insurance exists to protect us from the unexpected, so be honest and proactive with your insurer when your living situation changes. That way, you and your new housemate can both rest easy under the same roof, fully protected.
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