Do you have a few spare rooms in your home and have decided to rent them out to make your house more profitable? Assurances Multi-Risques would like to share its best advice with you to help you avoid any insurance issues.
First, we strongly advise you to contact your insurance agent or broker before renting out your rooms, as not all home insurers cover rooming houses. In addition, you must also declare this activity, as this clause is not part of your basic contract. This type of activity requires a special clause in your contract, namely a clause mentioning professional activities. According to insurers, a professional activity is defined as any activity that is remunerated and carried out on a continuous and regular basis, including a business, trade, liberal profession, or the rental of real estate. Please note that most insurers exclude the professional activity clause from the contract, unless otherwise specified by the customer. This is why it is important to declare this type of activity when it occurs, since otherwise your home insurer could refuse to pay your claim in the event of a loss. For example, if a fire broke out due to the fault of a lodger and you had not informed your insurer of your professional activity, the latter could categorically refuse to compensate you since this activity had not been mentioned to them.
A few tips for insuring your rooming house
- Immediately report this new activity to your insurer and ensure that your insurance policy includes a special clause stating that there are lodgers at your residence and that you are renting out X number of rooms.
- Ensure that the specific limit for business assets is sufficiently high if you rent out furnished rooms. In business activities such as room rental, the rented furniture becomes a business asset.
- Check with your insurer to see if loss of room revenue is covered in the event of a disaster.
Some tips to reduce the risks associated with your home insurance
- Ensure that each rented room has a smoke detector.
- Prevent boarders from cooking in their rooms. It would be preferable to invest in a shared kitchen or share your own kitchen with them.
- Select your boarders carefully. Don’t hesitate to ask them for references since you will be sharing your home with them;
- Have your boarders sign a lease;
- Avoid letting your rooms by the day or the week. Opt for an annual term and have your boarders sign a lease. Insurers don’t like short term leasing.
Assurances Multi-Risques strongly advises that you contact an insurance broker before you let your rooms. He will not only help you to save time, but will also help you to obtain what you need! Indeed, he will contact several insurance companies specializing in boarding house insurance in order to obtain the level of insurance coverage you need while making sure that you benefit from the best price possible!