Sandy asks: “Should I inform my insurance company and my mortgage provide if I’m getting a lodger. Will my insurance premium go up? Could my mortgage provider forbid me?”
Q&A 87 – Taking In A Lodger – Shownotes
I understand I should inform my insurance company and my mortgage provide if I am getting a lodger. What will they say? Will my insurance premium go up? Could my mortgage provider forbid me from getting a lodger?
In short, yes. You will need to inform your insurance company and your mortgage provider. Your insurance premium will probably go up. And, your mortgage provide could potentially forbid you from getting a lodger.
Changes To Your Insurance
Let’s start with the insurance. With an additional tenant, you will need additional cover. Whilst for a lodger you will not technically require landlord insurance, you will need some amendments to your home insurance policy which is likely to either increase your premium, restrict your cover, impost additional exclusions or most likely, a combination of all three. For example, it is common for the “unforced entry” clause provided in many home insurance policies to become void once you take in a lodger.
Regarding the mortgage provider, you’ll need to check the terms and conditions of both your individual product and the overall conditions of the mortgage provider. It is likely that you will be in breach of your existing mortgage if you were to take in a lodger, but this differs for different providers.
You’ll also need to think about other duties and responsibilities when taking in a lodger. For example, you’ll need to consider the “income” you’ll receive in relation to your taxes, and you may need to meet certain health and safety criteria (for example obtaining a gas safety certificate).
All in all, it will work out profitable to take in a lodger in most cases, but it’s worth making sure you’ve got everything you need in place before jumping in.
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