Renters Insurance When You Sublet

Your renters policy can cover belongings you leave in a sublet unit against fire, smoke, water leaks, and its other listed perils, subject to rental and home-sharing exclusions; the standard policy form excludes theft from any part of your home you rent to someone your policy does not insure, including theft by the subtenant. Your liability coverage can narrow too: business-related rental claims are excluded unless a rental exception applies, and the 2022 form excludes platform home-sharing from those exceptions. Your policy does not cover the subtenant's belongings or the subtenant's liability, so require the subtenant to buy their own renters policy, and tell your insurer about the sublet before it starts.

What your policy still covers while you sublet

The rules below come from the 2000 and 2022 editions of the standard renters form (HO-4) written by Insurance Services Office (ISO), which drafts policy language that insurers can adopt or change. Your own policy's wording decides, so read it or ask your insurer. For the full list of what a renters policy pays, see what renters insurance covers.

• Your belongings, against the listed perils. Personal property coverage applies to your belongings anywhere in the world. Things you leave in the unit and things you take with you stay covered against fire, smoke, burst pipes, and the policy's other listed perils, subject to the limits below.
• Not theft from the space you rent out. The form excludes theft from the part of your home that you rent to someone who is not insured under your policy. That covers the whole unit if you sublet all of it, and the subtenant's room if you sublet one room. The exclusion applies whoever the thief is, so it reaches a burglar as well as a subtenant who takes your television.
• Limits where you stay instead. If you move somewhere else during the sublet, belongings usually kept at a residence other than the one on your declarations page are limited to 10% of your personal property limit or $1,500 in the 2022 form ($1,000 in the 2000 form), whichever is greater. Both editions waive this limit for belongings in a newly acquired principal residence for 30 days after you begin moving them there.
• No coverage for belongings in a unit you rent out regularly. The form lists property in an apartment that an insured regularly rents or holds for rent to others as property it does not cover at all. The 2022 form also excludes belongings in space while rented or primarily held for rental to a platform home-sharing occupant, even for one stay.

The form defines your home, the "residence premises," as the unit where you live that is shown on your declarations page. If you move out for the sublet, ask your insurer whether it still treats the unit that way, since the theft and liability rules here depend on the answer. If it does not, furniture you rent to the subtenant along with the unit can fall under the form's exclusion for property rented to others away from your residence premises.

Does your liability coverage still apply?

Your liability coverage pays when you are legally responsible for injuring someone or damaging their property; liability coverage in renters insurance explains limits and defense costs. A sublet can trigger the form's business exclusion, which removes coverage for injury or damage arising from a business. Both editions treat a trade, profession, or occupation as a business regardless of earnings. For other qualifying paid activities, the exception requires that no insured received more than $5,000 in the 2022 form ($2,000 in the 2000 form) in total compensation across those activities during the 12 months before the policy period began. The 2022 form treats platform home-sharing as a business regardless of earnings.

The rental exceptions below do not apply to platform home-sharing under the 2022 form:

Two limits apply no matter how you sublet. The form's liability coverage excludes damage to property rented to an insured unless fire, smoke, or explosion caused it, so if a subtenant's overflowing bathtub ruins the floors, the liability coverage in neither your policy nor the subtenant's pays for them. And you stay responsible to the landlord: TexasLawHelp.org explains that you are responsible for unpaid rent or property damage caused by your sublessee, and California's Department of Real Estate notes that a subtenant answers only to you, not to the landlord.

Why your subtenant needs a renters policy

Your policy insures you, your spouse, and relatives who live with you. A subtenant is none of those, so:

• Their belongings are not covered. The form lists property of roomers, boarders, and other tenants who are not related to you as property it does not cover. California's guide says a roommate must take out their own renter's policy to protect their belongings.
• Their liability is not covered. If the subtenant's guest trips on the stairs, or the subtenant starts a kitchen fire that damages the building, your policy does not defend the subtenant. The landlord can still hold you responsible for the fire damage, and California's guide notes that a landlord's insurer that pays for a loss may sue the tenant who caused it. The subtenant's own liability coverage can pay claims for damage the subtenant is legally responsible for.

Put the requirement in the written sublease: the subtenant buys a renters policy with liability coverage that starts by move-in day, names your address, and stays in force for the whole sublease. Our guide to subletting your apartment covers landlord consent and what else the sublease should say. If the person moving in is a long-term roommate rather than a short-term subtenant, compare the options in renters insurance with roommates.

Short-term and paid home-sharing

Check your lease first. Most rental agreements prohibit using your unit as a short-term rental through sites such as Airbnb and VRBO, and many local laws prohibit it and carry heavy fines, California's Department of Real Estate warns. Texas law also bars renting your unit to anyone else during your lease without your landlord's consent, TexasLawHelp.org notes.

Under the 2022 HO-4, home-sharing uses a platform that handles the rental agreement and compensation. Even one stay triggers the business exclusion, without the occasional or partial-rental liability exceptions. Belongings in space while rented or primarily held for rental to a home-sharing occupant are also excluded.

Airbnb's AirCover for Hosts includes $1 million in host liability insurance and up to $3 million in host damage protection. Airbnb says the program is not a substitute for personal insurance and suggests asking your insurer how your own policy works with it. Before you host, ask your insurer in writing whether your policy covers paid stays or whether you need added coverage.

Steps before the subtenant moves in

1. Get the landlord's written consent to the sublet, as your lease or state law requires.
2. Describe the sublet to your insurer in writing: whole unit or one room, the dates, the rent, and where you will live. Ask whether the unit still counts as your residence premises, whether your liability coverage applies to the rental, and what theft coverage remains for what you leave behind.
3. Remove valuables. Take jewelry, electronics, and important papers with you or store them elsewhere, since theft from the sublet space is not covered.
4. Photograph and list what stays, room by room, with serial numbers for electronics, and give the subtenant a copy with the sublease.
5. Collect proof of the subtenant's policy before handing over keys.