Harris, Reed & Seiferth
Renting out your home or a room in your home on Airbnb can be a good way to generate income, but you need to understand what is and isn’t covered by your homeowner’s insurance.
Homeowners Insurance and Home Sharing
Homeowners insurance combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.
With home sharing, the rules are much less black and white. While some insurance companies will allow you to extend your homeowners coverage to a STR (short-term rental) if it’s a one-time event and you notify the insurer ahead of time, others contrarily may require you to purchase a specific endorsement, which is added on to your existing policy to cover the temporary rental.
When Home Sharing Is a Business
Regularly renting out your home or parts of it for income will generally be viewed as business activity by an insurance company. Instead, you’d need to purchase business insurance. If you’re planning to rent the entire home for an extended period of time, you'll need landlord insurance, as well. Landlord insurance covers the home itself as well as any structures that are on the property, such as a garage or shed. These policies typically cover you for losses such as fire or wind damage, but they won't reimburse you for damage caused by normal wear and tear or for the loss of your tenant’s personal property (tenant should acquire renters insurance).
Home Sharing as a Renter
You’ll also need to cover your insurance bases if you’re a renter and subletting to someone else. First things first: You have to be sure that your landlord allows you to sublet. From there, you need to check with your renter’s insurance company to see if your coverage would apply to someone who’s subletting. If you’re not planning to live in the rental while you’re subletting, the sublessee would need his or her own renter’s insurance. Keep in mind that if the sublessee damages any of your personal belongings while you’re away, your renter’s policy may not cover it.
Which Companies Offer Home-Sharing Coverage?
In response to the growth of the home-sharing industry, a handful of insurance companies are moving toward expanding coverage for homeowners who rent out their homes through Airbnb and similar sites. Luckily we're representing a few and writing policies! Next step? Run a quote for home share coverage! Talking to your insurance company or agent about what is and isn’t included in your policy can help you determine what’s needed to fill the gaps.
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