Does Your Homeowner’s Insurance Cover Airbnb?

Although renting out your home can be profitable, your homeowners insurance policy may not automatically cover home sharing. Protect your property from harm and yourself from personal liability claims with the necessary insurance coverage before you open your house to temporary visitors.

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TAKEAWAYS IMPORTANT

• Being an Airbnb host can help you earn additional money and fill up otherwise vacant residential space, but what happens if something goes wrong with your place?
• Airbnb does provide up to $1 million in insurance per rental, but that may not be enough, and filing a claim might be difficult.
• Short-term rentals are typically not covered by normal homeowner's insurance plans.
• Several speciality plans are now available to help protect against the hazards associated with short-term rentals.

Insurance for homeowners and home sharing

The expense of repairing damage to your house caused by fire, wind, or certain other natural catastrophes is usually covered by homeowners insurance. It also provides personal liability coverage in the event that someone is injured on your property.

When it comes to home sharing, the rules aren't as clear-cut. According to the Insurance Information Institute, if it's a one-time event and you contact the insurer ahead of time, some insurance providers will enable you to extend your homeowners coverage to a short-term rental. Other firms, on the other hand, may need you to acquire a separate endorsement to cover a temporary rental, which is added to your existing policy.

When it Comes to Home Sharing, It's a Business

If you rent out a portion of your home on a regular basis to make money, the insurance provider would most likely consider this to be business activity, which is not covered by a homeowners policy. You'd have to buy company insurance instead.

You'll also need landlord insurance if you want to rent out the full house for a lengthy period of time. Landlord insurance protects both the home and any other structures on the land, such as a garage or shed. These plans usually cover losses like fire or wind damage, but they don't cover damage caused by normal wear and tear or the loss of your tenant's personal belongings.

As a renter, you can share your home.

If you're a renter who sublets to someone else, you'll also need to cover your insurance bases. First and foremost, make certain that your landlord permits you to sublet. Then you'll need to check with your landlord's insurance company to discover if your coverage extends to a subtenant.

If you don't intend to live in the rental while subletting, the sublessee will need his or her own renter's insurance. Keep in mind that if the sublessee damages any of your personal goods while you're gone, your renter's insurance may not cover the damage.

What Companies Provide Home-Sharing Insurance?

A number of insurance firms are moving toward expanding coverage for homeowners who rent out their houses through Airbnb and similar sites in reaction to the development of the home-sharing sector. The following are four examples:

If they share their house for more than 31 days, Liberty Mutual policyholders can extend their current coverage with Liberty Mutual HomeSharing Coverage.

Verisk Analytics ISO—Insurance Service Offices Inc. (ISO), a Verisk Analytics subsidiary, offers solutions to the unique hazards that homeowners experience while renting their houses online. Liability, theft, vandalism, and damage to guests' belongings are all covered.

Allstate's HostAdvantage House-Sharing insurance is a unique policy that protects your personal possessions when you rent out your home. For example, if a renter steals something or a thief breaks in while you're away, you'd be covered. You'd also be insured if your furnishings or carpet were accidently damaged by a renter.

Airbnb Host Protection Insurance is a service provided by Airbnb. This policy protects you against third-party claims for personal injury or property damage up to $1 million. The Host Guarantee, on the other hand, provides up to $1 million in coverage for losses to your personal belongings or the home itself.

Final Thoughts

Before embarking on the home-sharing bandwagon, make sure you do your homework. If your insurance provider determines that renting out your property on a regular basis is considered business activity, it may reject you as a policyholder. Even if you're only renting your house for a short time, you can't afford to risk your insurance. Talking to your insurance company about what's covered and what isn't will help you figure out what you'll need to fill in the gaps.