For the seventh consecutive year the number of live-in landlords has increased – by 25.4% between 2011 and 2012. A similar rise occurred between 2010 and 2011, of 18.4%.

But while renting out a spare room is an effective way of increasing a property owner’s income, there is evidence that it has resulted in the invalidation of many insurance policies. According to a recent survey by SpareRoom and Property 118, 37% of homeowners with lodgers may not be properly insured.

33% of landlords are unaware that taking in a lodger could invalidate their home insurance. More worryingly, 4% of landlords do not have any insurance at all.

The survey also found that 27% of live-in landlords may have been offered inappropriate landlords insurance cover; being offered buy-to-let insurance that has been designed for live-out landlords, for example. Additionally, 40% found extending their liability insurance to cover against lodger accidents very challenging, as well as finding a policy that included cover for malicious damage to their belongings or property.

However, 57% of those landlords whose existing insurers could actually cover having a lodger, found that it was covered as standard. The remaining 43% were charged an additional fee.

The increased number of lodgers in the UK reflects big changes in the nation’s accommodation sector, and it is likely that some parts of the insurance industry will take time to adapt to the changing needs of landlords.