Most insurance agents would warn you that renting out your home using a service like HomeAway, VRBO or Airbnb is a risky business that could cost you more than you earn if you aren’t careful. However, many homeowners still choose to use these services to rent out their homes and make some extra cash throughout the year. If you engage in this activity, you need to be sure that you have invested in the right insurance coverage to protect yourself from any associated risks.
Primary Insurance Coverage
Some online rental services, such as Airbnb, provide primary insurance coverage for homeowners who decide to list their properties for rent. However, these policies are highly limited and only apply under specific conditions. Any losses that are not covered by the service’s primary insurance will either be your responsibility or the responsibility of your homeowner’s insurance company, depending on the circumstances.
Homeowner’s Insurance Policies and Online Rentals
In some cases, a home insurance policy will provide coverage for a homeowner who rents his or her home out online. However, every insurance company is different, and this coverage is not guaranteed. Even if your home insurance policy does provide some coverage, there are likely to be limitations. Furthermore, the coverage provided by a homeowner’s insurance policy in this situation may also differ by state.
Before you decide to rent out your home online, you need to evaluate your insurance coverage carefully and deal with any gaps. For example, if someone destroys the property in your home, it may not be covered by the online service’s primary policy or your homeowner’s insurance policy. In such cases, if you don’t have any additional policies that cover this loss, you will have to deal with it on your own.
Other Issues to Consider
Deciding to rent out your home on Airbnb or another similar service will change your life in many ways. Although it may add to your income, it can also expose you to risks and additional expenses. Likewise, renting out your home can cause non-insurance related problems as well.
For example, if you have neighbors nearby, they may not appreciate you renting out your property to different people, which could cause problems in your relationships with them. Renters can also be messy, which means that you will need to clean your home in between rentals at your own expense. In addition, if you belong to a homeowner’s association or condo association, you must make sure that you are allowed to sublet before you list your property for rent.
Check with Your Agent
If you have decided to rent out your property online, you need to make sure all of your bases are covered. Before you list your property for rent or accept your first tenant, you need to talk to your insurance agent about your situation and your insurance needs. Please contact Brian Van De Hey Insurance today to learn more or to make an appointment with an experienced insurance agent.