Insurance when renting out individual rooms in SFH in SF Bay Area

6 Replies

Hello BP,

I am renting out individual rooms in a 5 bd 3 bath single family home in the SF Bay Area. I called a couple of insurance companies to ask for quotes on property insurance, but none of them would cover it. They said I could have only up to two unrelated parties occupying the house for them to be able to cover it under a typical landlord policy. One of them mentioned that I should get a business license since what I have here is a hostel/boarding/lodging operation (and insurance premiums would be 10x a typical landlord policy if I were to rent it out to a family instead). 

Are there any insurance companies in Bay Area that would cover this under a typical landlord property insurance.

  @Shree P.   So I'm a licensed insurance agent and I agree with @Jonathan Pflueger , that is a great question! The issue here that a bulk of insurance companies will have it that the predominant opinion of highest and best use of an SFR home is just that, a single family. When you have multiple tenants in a home that is not built or zoned as units, it presents a unique risk layer having to do with personal safety. In the industry, we consider it a boarder house which in most cases, is an ineligible property for the aforementioned reasons.

Factually, it's a real life situation and makes perfect sense with the cost of housing what it is.  When there is a situation I can't help with directly, I reach out to my network of brokers who specialize in stuff like this.  I will do some research and post back with what I find... 

@Jonathan Pflueger @Joe Stretch Thanks!

That's great. I've been unsuccessfully pursuing this for months with various insurance agents and it took just a day on BP! Thanks Joe.

Where can I look for secondary market carriers that would do this, do you have any recommendations. I am looking for the Dwelling (fire, water damage), Liability (at least $300k) and loss of rental income from covered loss. I don't need Personal property, burglary, vandalism, building code etc.

@Shree P. Of course, happy to help.  The insurers aren't consumer direct, you'd have to work through a licensed broker.  I'm not able to list a phone number or email address in these post threads, and I'm sure that's for the best, but Google my name at a .com and call my office.  I can put you in touch with someone that can help. 

Moderator, hope that's ok!