Budget Concerns: How Much Insurance is Enough?

The People On Your Property: Who Does Your Homeowners Insurance Cover?

15 September 2015

Dustin Duncan

Your policy can automatically cover a lot of people to one degree or another. It covers

• Whoever's name is on the policy (you)
• Your spouse and your children
• Visitors, guests, and those you invite over

People who work on your property also receive some protection under your homeowners policy. That can include nannies, housekeepers, maintenance people, etc.

When Your Child Goes Away and Returns

Your coverage is rather broad as well. For example, if your child leaves and goes to school for several years, they can still have some coverage from your policy. If your child returns home to live, your coverage will accept him or her as if they never left.

Notice that while your insurance can cover many people or their property, there's one group explicitly left out. That group includes renters, boarders, or anybody that will pay you money to stay over.

What About Boarders?

The good news is that many insurance carriers simply don't care if you charge someone to stay with you. Some may not like it and want to treat it as a commercial endeavor. But if you shop around, you'll see that it's not that big of a deal in most cases.

If it's one person, maybe even two, then you're probably alright. However, there  are a few things you should know.

Your boarder will need renters insurance – While your home insurance company may not mind a boarder, they also will not insure that person's belongings. Renters insurance can protect their stuff if anything should happen.

You will need a lease – You should definitely work up a lease and have your boarder sign it. Even if it's just a family member. This can help to make sure there are no misunderstandings.

You can also submit the lease to your home insurance company. In fact, with a lease in hand, your insurance company can start covering you for loss of rental income.

Get the Facts First

Different insurance companies handle coverage of other people in different ways. That means you need to inquire with your insurance company first to figure out just who is covered and to what extent.

For example, you should inform your insurance company of any changes. Don't assume that when your child is away, your coverage will automatically kick in for their off-campus apartment. It may, or may not, so you should make sure to ask.

The same goes for boarders. Even though you don't see it as a commercial endeavor, your insurance company might. You don't want to turn helping out a buddy into an expensive ordeal. So always make sure you ask your insurance company first. Contact a company, like The Selzer Company, with any questions.

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