Renting your home can be lucrative, but your homeowners’ policy may not automatically cover home sharing. Before you open your home to temporary guests, protect your property against damage and yourself against personal liability claims with the right insurance coverage.
KEY TAKEAWAYS:
- Being an AirBnb host can help generate extra income and utilize otherwise empty residential space – but what if something happens to your property?
- AirBnb does offer up to $1 million of its own coverage per rental, but that may not cover everything – and making a claim can be complicated.
- Most standard homeowner’s insurance policies exclude short-term rentals and so will not cover them.
- Several specialty policies are now being offered that help insure against the unique risks posed by short-term rentals.
- Homeowners Insurance and Home Sharing
- Homeowners insurance generally covers the cost of repairing damage to your home caused by fire, wind or certain other natural disasters. It also offers personal liability protection in case someone is injured while on your property.
With home sharing, the rules are much less black and white. According to the Insurance Information Institute, some insurance companies will allow you to extend your homeowners coverage to a short-term rental if it’s a one-time event and you notify the insurer ahead of time. Other companies, however, may require you to purchase a specific endorsement, which is added on to your existing policy to cover a temporary rental.
When Home Sharing Is a Business:
If you’re renting out part of your home on a regular basis to generate income, the insurance company generally views that as business activity, which is not covered by a homeowner’s policy. 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.