NYS - I recently created an efficiency apartment and now rent to one person who is an excellent tenant. Do I need to notify my homeowners insurance company? I don't have a lease with her and she pays me cash every month. We do have a swimming pool which she enjoys using, however she does invite friends over to join her. We are concerned about our liability in the event of an accident - i.e. a deck chair breaking and causing injury. How much additional homeowner insurance will this cost?

First, you are asking for trouble without a lease. Make sure you get one in writing and make sure it is valid in your state. As a landlord, you should contact your insurance company to determine whether you can add to your current policy, or if you need a separate policy for your rental unit. I would add an inexpensive umbrella policy for a million dollars to protect yourself once you've met requirements for a tenant with your regular homeowner's policy.

I agree with Teacherjenn4, you do have liability for stupidity and/or accidents on your property by her guests. You have to contact your insurance agent to find out how much it will cost.