Insurance Options for Homeowners Who Rent Their Homes
If you are a homeowner, have you thought about renting it out to vacationers on a sharing application like Airbnb? Renting out your property is a great way to earn some extra income, but there are important aspects that need to be taken care of before doing so.
One being your insurance implications. If you are renting out all or even just parts of your home on Airbnb, insurance guidelines need to be understood to prevent you from paying thousands of dollars out of pocket on an insurance claim.
One of the main problems with Airbnb, as with other sharing economy companies like Uber and Lyft, is that it is so new that the regulatory and insurance areas are ‘grey.’ An Airbnb rental is not a ‘traditional’ house, nor is a commercial property, so how is it classified related to your insurance coverage?
It can be confusing which coverage you need, and what policies are best for you. Don’t worry, QuoteWizard.com has come up with a quick guide to get you on your feet.
This type of coverage is best for homeowners who want to rent out their home less than 30 days out of the year. You need to check with your current homeowner’s insurance policy because many will still not cover your Airbnb rental home if something does happen while patrons are vacationing on your property.
Business Property Insurance
A sure way to protect yourself comes in the form of business property insurance. Since you are renting out your home, it has been classified as ‘hospitality’ and ‘hotel insurance’ which is the closest association to what Airbnb is.
This type of coverage is acutely similar to your homeowners' insurance in that it covers property and liability coverage for people who rent out your home. Property damage will cover any damage that your visitors do, and liability will cover any potential medical injuries and legal expenses that may follow.
This type of insurance is best for those who don’t usually live in their home and mainly rent out their property. You make a lot of money from all the people who rent out your home, but much more can go wrong, forcing you to have more insurance coverage.
It covers everything business property and homeowner’s insurance, but to a higher degree. Just one slip from one of your visitors can be expensive, and with people constantly coming and going, there is a greater chance of an accident.
Do not compromise a cheaper insurance rate for less coverage. Like mentioned, one slip can end up with a broken leg and the medical and legal expenses that follow.
Live in the Home You’re Renting?
You’re still covered! If you still live in the home while renting it out, you can get a ‘unit or residence rented to others’ endorsement on your homeowner’s insurance policy. It will offer your needed property and liability coverage, but at a lower rate since you are still on the property at the time of rental.
This type of coverage adds extra liability coverage when your current homeowner’s policy has run out of coverage. It also covers personal and property injury claims and legal fees if the other party presses charges.
If you are renting out to people who are more likely to sue, this is a good option. The coverage has increments of 1 million upwards to 10 million, giving you a wide range of options to protect yourself.
Host Protection Coverage
Airbnb has its own liability coverage. It is free, automatic, and in the amount of 1 million dollars. It has protection from liability and property damage if someone decides to sue you.
While this option seems like the best, there are exclusions that need to be noted. Every situation is different, and you might want to read their insurance section to understand the nuances for your situation. Read here to check up there latest insurance policies from Airbnb.
In all, it might be best to contact an independent insurance agent and consult on the options described above to find your best fit protection.
Did you know that by using NoiseAware you qualify to reduce your premium?! We’ve partnered with Proper Insurance to help get you the best rate possible! Feel free to contact Proper to learn more about how you can save today.
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