Rent a Room Scheme Home Insurance

Home Insurance and Lodgers / Home Insurance and paying guests / Home Insurance and Rent A Room scheme - insurance cover for your home buildings and contents

Many people are letting out or considering letting out their spare room to provide a valuable tax free income and help them meet their mortgage or other living expenses, or just because they would like some company.

The Government's Rent A Room scheme can help householders who have lodgers living in their only or main home. The money you earn from the rent a room scheme is tax-free up to £4,250 a year. The scheme can be used by homeowners as well as tenants. However if you are a tenant it is important that you check with your landlord whether you are allowed lodgers under your tenancy agreement.

Under the rent a room scheme rules:-

The lodger's room must be in the home owner's main premises.
The lodger is not allowed to run a business from their rented room.
The lodger's accommodation must not have its own kitchen and bathroom facilities.

The paying guests may be:-

Students lodging with you
Foreign Students lodging with you
Short term paying guests (e.g. guest house)
Long Term Lodgers
Lodgers in your home under the Rent a Room scheme
Short Term paying foreign visitors / tourists
Paying guests that reside only during the week or weekend
Foster children
Bed and Breakfast guests

It is also very important that you tell your insurance company and mortgage lender. If you fail to advise your insurers of the fact that you have a tenant, they could refuse to pay a claim due to "non disclosure of a material fact". You should do this BEFORE you have anyone move into you home. Failure to notify an insurance company that you take in lodgers could invalidate your insurance policy, so it is important to check with your insurers.

Also, we recommend that you ask your lodger to obtain their own insurance for their contents, as it is unlikely that there would be any cover under your home insurance policy.

Also, be aware that most home insurance policies would not cover you if your lodger were to steal from you, as the cover is normally restricted to theft of your contents following forceable entry.

Ring Julie on 0116 284 6094 for insurance advice and a quotation for your home insurance including Rent a Room / lodger cover and see how much you can save!

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