Home insurance works to protect your home and its belongings in case of a disaster. It covers a range of dangers, such as:
- Weight from snow or sleet
Home insurance provides compensation for damage or loss to the home and your belongings, but what if you rent a room to a friend? Are their belongings covered? 
First, it’s important to know that renting out a room in your home can change your policy. Having a tenant essentially makes you a landlord of sorts and requires a change in home insurance. Your premiums are also likely to rise, since there is a rise in liability and property coverage needs. The good news is that home insurance may cover some of the renter’s items in case of disaster and will cover the room itself. Unfortunately, this coverage for the renter may be limited. Anyone renting a room should invest in renters insurance, which is relatively cheap insurance that offers personal liability and personal possessions coverage.
What Happens if a Renter Damages a Room in My Home?
Accidents happen. If a fire starts in the rented bedroom because of a forgotten candle, your home insurance policy will cover damages to the room. While the home is being rented, the dwelling is still the insured’s responsibility. This doesn’t mean the policyholder can’t sue for damages, but it does mean that insurance should help repair the room or home after such an accident.
Furthermore, renters insurance does not cover the physical dwelling itself, since the dwelling should be covered under another’s insurance.
Do I Need Commercial Insurance to Rent Out a Room in My Home?
If you’re simply renting a room to a single friend or family member, you likely won’t need commercial property insurance or other business insurance related to the rental. If you own a bread and breakfast or rent out several rooms, however, you may need extra business coverage. Business coverage helps balance out the additional risks that come with bringing others into your home. With more people sharing a single home, accidents, injuries and lawsuit claims are a higher likelihood. Having extra insurance to cover theft, negligence and bodily injury is important for those using their home as a business.
Either way, it’s important to inform your insurance agency of any changes in ownership or renting. If you don’t, even a normally covered accident may not be covered if a tenant is involved, of whom the insurance provider was not made aware.
Coverage Limits Still Apply
Normal coverage limits on your home insurance policy apply to the renter and their belongings. Most home insurance policies do not cover flooding, earthquakes and mold. These policies also typically have limited coverage for items like jewelry, furs and art. This is another reason that anyone renting a room should invest in renters insurance.
Another reason is that the same limits apply when it comes to filing claims. If you file a claim on behalf of a renter, you may have less ability to cover your own items if you have to file a claim later. You may change your home insurance to have higher limits, but this also means more expensive premiums. Be sure that whoever you rent a room to is trustworthy and has their own insurance to cover their personal liability and belongings. You are allowed to (and should) conduct a background check and ask for the renter to provide valid identification and proof of income before allowing them to move in.