the rise of online community marketplaces,
more people are turning to renting out rooms or their entire homes to
for extra income. However, insurance coverage questions arise when an
expects a person to be using the home in one way, but later finds out
conditions have changed. To ensure you are protected, read these tips
National Association of Insurance Commissioners.
are home sharing websites?
has changed the way people interact. There are now online solutions
that let people rent a room or their home to a stranger they meet by
app or a website, called home-sharing solutions. Home-sharing or
rentals (P2P) are sites like Airbnb, Roomorama and HomeAway that
with guests. Guests find a property and pay for the stay like a hotel.
difference is that the property is not a licensed hotel or bed and
and is often a privately-owned apartment, condo or house. Anyone can
as a host or guest.
What if your
guest vandalizes your property, the hallway of your condo or even your
neighbor's swing set?
What if your
guest gets injured on your property?
and hosts could incur costs if things go astray. As a host, your
homeowners or renter's
insurance policies are not designed to cover accidents arising from
rental and your insurance company may deny coverage for any resulting
operating as an online platform, these types of rentals may fall
local zoning or housing laws and regulations, which could result in
local law or code. Even if you have not violated any law, you might
hire legal counsel to protect and defend yourself.
can you protect yourself as a host?
can happen, anytime, anywhere. Even if you take preventative measures,
could trip over a rug or fall over their feet, causing injury.
homeowners policies provide coverage if a home visitor falls and is
However, that is likely not the case if a paying guest falls in your
because coverage may not be intended for commercial use. And without
insurance protection from the company facilitating the host agreement,
homeowners or renter's insurance policy might leave you with no
policies vary, but usually exclude or provide very limited coverage for
homeowners who are running a business in their home. Once you begin
income from renting out your home or a room, you are probably
home-based business. If you lease out a room or your entire home for
your insurer could claim you're essentially running a hotel or bed and
breakfast and deny coverage. However, if you seldom rent out your home,
insurer might provide coverage. A renter's insurance policy is subject
same limitations as a homeowners insurance policy.
To make sure
you are protected, talk to your agent about your situation and
this activity. If you only occasionally rent a room or your house, your
homeowners insurer might be willing to provide an endorsement to
However, if you plan to rent your house for a long term or if you plan
frequently rent out a room or the whole house, then purchasing a
policy (also known as landlord property insurance or rental coverage
landlords) might be your best option. A landlord insurance policy will
your home, structures on the property, property contents that you own
appliances and furniture), lost rental income due to building damage,
fees and liability protection.
recommend only renting to guests who have homeowners, renter's or
liability insurance and are able to show proof they are insured. Then
property is damaged, you could file a claim under the guest's policy.
can you protect yourself as a guest?
homeowners, renter's or personal liability insurance policy will
protect you even as a guest if you happen to cause damage to a host's
But understand that per Airbnb's user agreement, the company reserves
to make a claim under your homeowners or renter's policy for any damage
you cause to an accommodation. Other P2P companies may have similar
else do I need to know?
Airbnb provides host protection insurance with coverage up to $1
million if a
third-party claims bodily injury or property damage against you as a
liability insurance program is automatically applied to every listing
U.S. and the coverage is secondary. It only applies after your primary
insurance policy either settles or denies a claim. Laws regarding P2P
vary from state to state, even city to city so it's important to speak
who is knowledgeable about your location. Since home-sharing companies
still a fairly new phenomenon, talk with your agent or insurance
your risks as a host to make sure you are properly covered before you
property for rent.
Knowledge is power and the more you can educate
yourself about insurance issues related to rentals in the share
more information about insurance tips in the share economy, visit www.InsureUonline.org
including the Sharing Economy page.