Does My Home Insurance Cover Short-Term Rentals?

Short Term Rental Insurance

Many homeowners are now looking to short-term rentals to make some extra money. With services like Airbnb or HomeAway, its easier then ever to connect with people looking for a place to stay. However, before you submit your listing it’s important to do some research to learn what is (and what is not) covered in your homeowner’s insurance. While we’d like to believe that nothing bad will happen to us, it’s important to be prepared in the event that your property is damaged or someone is hurt during their stay. Read on to learn some of the legal and insurance implications that are associated with renting your home, and how to make sure you’re protected!

You Home Owners Insurance Most Likely Does Not Cover Rentals

The majority of home insurance polices do not cover renters unless previously discussed with your agent. Most policies are meant to cover the activities of the homeowner and guests only. Once a guest starts paying to stay in your home, they are considered a renter, and their actions will no longer be covered under your insurance.

Don’t rely on the service provider’s terms and policies

All too often people rely on the property sharing service’s terms and polices to keep them safe and don’t think twice about the risks involved or what could happen if their property were to be damaged. While these terms do promise coverage for damages, most of the time all claims are subject to an investigation by the company. These investigations are at the cost of the host, and can become long and drug out. On the other hand, if you have your own coverage, your broker will take care of all the work, and you are generally compensated for damages quickly.

How to rent your property the right way

If you’re interested in renting out your property on services like Airbnb, here are a couple steps to take to make sure you are protected.

  1. Talk to your insurance agent to make sure you have a thorough understanding of your current home insurance policy and what it does and does not cover.
  2. Advise your insurance company that you are looking into short term rentals. Short term rentals carry more risk than typical rental agreements, and as a result may require you to get extra coverage to make sure you are protected from theft, vandalism, and damage. While this can sometimes mean your insurance is going to be more expensive, it’s better to know that you have all your bases covered.  
  3. If you’re a condo owner, check with your condo board. Many condo boards have rules in place to keep short-term renters out of the building. It’s important to check with your board to make sure you aren’t in violation of any existing policies.
  4. Investigate how visitors are screened. Your home is your safe haven, and should be treated with respect. You wouldn’t let just anyone in your home, so be sure to learn how your home sharing service provider screens and approves their applicants.

Short term rentals can be a creative way to make some extra cash, but before you enter into any agreements, it’s important to do your research and take steps to protect yourself against the unexpected. If you have questions about renting out your property, talk to the experts at Capital Insurance Brokers. You can rest easy knowing our team will have you protected.

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