Empty nesters, singles and young couples sometimes choose to rent out a room or their basement to gain a little income from unused portions of their residence. If this is your plan, you need to consider the insurance implications.
Some homeowners insurance policies automatically cover a small number of live-in tenants, but others place limits on such situations. In all cases, you should notify your agent of additional extended-stay residents. You may be asked about the living situation, such as if the renter is a relative, if the space has its own entrance, and if it’s in a separate structure, like a guesthouse or a garage.
If your homeowners insurance doesn’t cover your rental situation, you can look into landlord insurance, which protects you from both liability claims and property damage caused by your tenant.