Do I need landlord insurance if renting to family is asked by owners who reasonably feel that letting a house to a son, a parent or a sibling is not really letting. The insurance answer is that it usually is. What decides the position is whether the owner lives there and whether anybody is paying to occupy it, not the relationship between them.
What a household policy actually requires
Home insurance is written for a property occupied by the policyholder and their household. A relative living there instead of you, whether or not they pay rent, means the property is not occupied by the policyholder. Most wordings then either exclude the situation or require the insurer's agreement, and an undisclosed occupancy is grounds to reduce a claim.
Rent or no rent, the exposure is the same
A relative can be injured by a defective stair rail exactly as a stranger can, and a family member's claim against the owner's liability cover is not unusual. Family occupation also tends to be long, informal and undocumented, which makes the position harder to prove later rather than easier.
Why insurers still want to know
Not to charge more. Family lets often price well, because the occupancy is stable and the occupants care about the property. Insurers want the occupancy described accurately so the policy responds, and the premium consequence of telling them is usually smaller than owners expect.
The practical answer
Tell the insurer who lives there and on what basis. If the property is let to anybody other than you and your household, buy a landlord policy. Where the arrangement is informal, a short written agreement helps both the insurance and the family, because it records what was agreed while everybody still agrees on it.
Questions people ask about do i need landlord insurance if renting to family
Is letting to family still letting?
For insurance purposes, generally yes. What matters is that the policyholder does not occupy the property, not the relationship with whoever does.
Does it count if they pay no rent?
Usually still yes, because the property is not occupied by the policyholder. Tell the insurer either way and let them decide.
Will it cost more?
Often very little, because family lets are stable occupancies. The cost of not saying is much higher.
Do I need a tenancy agreement with a relative?
Not for the insurance, though a short written agreement records what was agreed and helps if the arrangement later changes.