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Lodger levels rise but over a third might not be insured

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Lodger levels rise but over a third might not be insured


Published by Anonymous for in Housing and also in Communities, Regulation

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The number of homeowners taking in lodgers has risen for the seventh year in a row, but research suggests that 37% may not be properly insured.

A survey of 'live-in landlords' by flat and house-share website,, found that 33% didn’t realise that having a lodger could invalidate their home insurance, and 29% said their insurers don’t offer add-ons to their policies which would cover them for having lodgers.

The number of homeowners taking in lodgers rose by more than a quarter (25.4%) between 2011 and 2012, having risen by 18.4% between 2010 and 2011.

The biggest increase in homeowners taking on lodgers over the past year was seen in Falkirk, Scotland which has seen a 28% rise in 2012 compared to 2011.

Three other Scottish cities also feature in the top 10 – Aberdeen (21%), Glasgow (20%) and the North Lanarkshire town of Motherwell (21%), situated to the south east of Glasgow.

In England, Wigan and Derby saw the largest increase in lodger numbers, up 23% and 22% respectively.

Although the number of homeowners becoming live-in landlords is rising – helped by the Government's ‘Rent A Room’ scheme, where homeowners taking in lodgers can benefit from tax-free annual earnings of £4,250 – 60% say that finding appropriate lodger insurance is difficult.

According to the survey, 27% of live-in landlords have been incorrectly offered landlord insurance, designed for buy-to-let landlords who rent out the whole property to tenants, while 40% have struggled to extend their personal liability cover to include accidents to lodgers or to find cover that includes malicious damage to their possessions or property.

On a positive note, where their existing insurer was able to cover having a lodger, 57% of landlords reported that this was provided as standard.'s director, Matt Hutchinson, said: "With the economy still in a fragile state, it’s not surprising that earning some extra cash by renting out rooms in our homes is still proving extremely popular, but there are clearly issues where insurance is concerned.

"It seems insurers haven’t caught up with the trend for lodging as opposed to more formal tenancy contracts, with many offering wholly inadequate policies that make no provisions for the needs of the modern live-in landlord. It is rare for an insurer to provide even the most basic cover for legal liability for accidents to lodgers, loss of rental income, or damage to property.

"As well as being a headache to obtain, lodger insurance can often be very restrictive – most insurance companies who offer such policies often prohibit homeowners from taking in those on housing benefit or students. Live-in landlords should also be aware that in the case of theft, their case will only be considered if there is evidence of breaking and entering.

"The most important thing for homeowners to be aware of is that if they take in a lodger they may be in breach of their existing home insurance policy. If you are planning to take in a lodger, never underestimate the importance of doing your homework and finding an insurance policy which gives you the proper cover that you need."


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