How Does Subletting Your Apartment Affect Your Insurance?

A close-up of a renter handing the keys over to a person subletting the apartment.If you’re a renter and are planning a long leave of absence from your apartment or are intending to leave it entirely before the end of your lease, you might be thinking of subletting your rental space. While this seems a great way to cover your rent and avoid breaking your lease, the insurance implications can become quite complicated. That’s why we’re here to explain how subletting your apartment affects your insurance and how to maintain the appropriate coverage.

What is Subletting?

A sublet – also known as a sublease – is a legal contract that allows a tenant to rent their apartment to another person, known as a sublessee or subtenant. Some reasons tenants may consider subletting their apartment include:

  • Moving to a New Area: If you’re moving to a new area but have months left on your rental lease, you can avoid breaking your lease and succumbing to all the penalties associated with it – such as damage to your credit score – by having another person live there and cover your costs.
  • Long-Term Travel: If you’re planning on a long backpacking trip or taking a temporary job overseas, you can keep the lease in your name by subletting. Your rent costs will be covered, and you’ll be able to return to your apartment after your travels.

Subletting your apartment is unlikely to affect your lease, as long as local rental laws state you are permitted to sublet your apartment. However, subletting can complicate your insurance policy.

How Does Subletting Affect Your Insurance?

If you’re planning on leaving behind your belongings during your departure, you will need to contact your insurance provider to inform them of the residency change. In some cases, the provider may void your renters insurance, meaning the financial responsibility of your property and any liability will fall upon you. In this situation, being honest with your insurance company will allow them to design a policy that’s suitable to your needs. Due to the risks, your provider may suggest you invest something closely resembling landlord’s insurance, as your rental property might be treated more like a business.

What if You’re Leaving Your Apartment Empty?

Since you’re still responsible for any potential injuries that should occur in your apartment, you are recommended to purchase liability coverage at the bare minimum. This includes injuries that befall the sublessee.

Does the Sublessee Need Insurance?

The subtenant’s belongings are excluded from the tenant’s insurance policy. While they’re not responsible for liability claims, in order to protect their personal property, they’ll need their own renters insurance. However, depending on the sublease agreement, certain responsibilities can be transferred over to the subtenant.

What You Need to Tell Your Landlord?

Before subletting your apartment, it must be cleared by your landlord. This means a sublease agreement must be signed by you, the landlord, and the sublessee. This contract is a legal agreement that outlines the responsibilities of all parties during the sublease term. This can include such provisions as a separate security deposit paid by the subtenant and the transfer of late fees if the rent payment is delayed. However, the responsibility of liability cannot be transferred from the original tenant to the sublessee. All duties and obligations from the original tenant remain in place.

Since subletting your apartment can affect your insurance in several ways, it’s important to discuss your options with an independent insurance agent. It can be a risky endeavor, so it’s important to ensure you’re not solely responsible for losses. At TJ Woods Insurance, our agents are well-versed in the needs of subletters and sublessees and can outfit you with the renters insurance and liability coverage that best suits your needs. If you require unique coverage for your changing needs, contact us today.