If a single person buys a house, they likely want to make sure they can afford the costs of mortgages, upkeep and related expenses. Some people might decide to get a roommate in this instance. Roommates can often help homeowners make some of these cost ends meet. However, roommates are also liabilities to property owners. Therefore, the homeowners insurance needs might change. Here are a few reasons why.
Understanding Roommates In Owned Homes
Owning a home and having a roommate might seem very convenient. Indeed, it usually is. However, roommates are also liabilities to you, the property owner. By renting out part of the space, you allow your roommate to use that space as if it is their own. However, if problems happen in the home, they might impact both residents. Mistakes made by the renter, however unavoidable, might still wind up costing you money.
For example, you never know if your renter will accidentally cause a kitchen fire. Still, because you own the house, you could suffer from these losses, too. Therefore, what can you do to ensure that you have appropriate homeowners insurance for these losses?
Changing Your Homeowners Coverage For Renters
Every homeowner will heed a homeowners insurance policy. This coverage can such provide protection staples as structure coverage, liability insurance and possessions coverage for your owned belongings in the home.
If you plan to rent out part of the home to a roommate, speak to your insurance company. Some won't require you to take any additional action to change your policy. Others might require you to increase your coverage, or even buy a landlord insurance policy.
Depending on the rental agreement, you might need to increase your coverage. For example, if you were to damage the renter's personal property, or if they sue you, then you might need higher liability insurance limits to cope with the losses.
Make Sure The Renter Gets Their Own Insurance
In many cases, your personal homeowners insurance won't extend appropriate protection to the belongings or liabilities of renters. Therefore, the renters themselves will likely need their own renters insurance policy. This coverage will apply to their possessions, their liabilities and related costs. Sometimes, if the renter damages something in the home, their coverage can help you pay for the damage — if you make a liability claim.
When preparing to rent your home, make sure you have a lease, and also require the renter to buy renters insurance. This will help smooth over any confusion that might arise in the event problems happen in the home.