Homesharing or peer-to-peer rentals(P2P) occur when you rent out part of your home to short-term paying guests. There are many regulations governing renting out your home for a fee during any part or all of the year. Your home owners insurance may not cover damages that occur at the hands of someone renting your property and your insurance company may consider your rental to be a business or bed & breakfast, requiring you to take out a different kind of insurance policy. This policy is known as a Dwelling Fire Insurance Policy, personal liability would need to be added. and everyone who home-shares needs this combination of policies.
Liability insurance is important to anyone who is involved in home-sharing because it protects you against guest injuries or damages caused by guests staying in your home. To make home-sharing a little more efficient you may choose to use a service such as Airbnb, HomeAway, or another service that connects hosts with guests and allows you to control when and for how long you are renting your home. These kinds of services have many benefits that make sharing easy, enjoyable, and safe, however, they can leave you financially vulnerable if you aren’t properly insured. Think about it, if your renter starts a fire and damages your property or is hurt while renting your home, will you be protected? If your renter is injured on your property are you protected? Are you sure? First, talk with your insurance provider to understand what your existing homeowners’ policy covers and ask what exclusions might apply. As a host, your homeowners or renter’s insurance policies are not designed to cover accidents arising from property rental.
A liability insurance policy packs a punch when it comes to providing coverage in the event that damage or injury occurs during a guests stay at your home. It works in conjunction with your existing homeowners’ policy, so you don’t need to make any changes to your regular policy each time someone stays at your home. It allows you to choose the months you need coverage, so you’re not over-insured if you don’t home-share all year round and it follows you no matter how you manage your home-sharing services. Home-sharing Liability Insurance can provide up to $1 million in Commercial General Liability insurance, for bodily injury to the guest or for property damage. It also reimburses you for 90 days lost rental income should you have to renovate or repair damage caused by a guest. Coverage for up to $5,000 for damages caused by your guest that exceeds $10,000. By purchasing such a homesharing liability policy, you are being a responsible host not only to yourself but to your guests as well
What many people do not understand is that their regular homeowners or renters policies are not enough to protect them against liability claims arising from what is considered to be the commercial activity of renting out their home. If a home-share guest an injury while in your home, they can sue you for damages. You don’t want to find out after an incident that your regular homeowner’s policy won’t protect you. If you are only planning to rent your home out for a single occasion, many insurance companies will extend your coverage to the renter as long as they insurer is notified ahead of time.
Other things you can do to help protect yourself against renting to an unsavory guest.
- Complete a thorough interview of anyone you intend to allow access to your home. Most home sharing sites offer a screening service that gives you an overview of a candidate’s background, but you likely want to go further.
- Ask for identification
- Reference checks
- Ask for deposits
- Require paying guests to have their own homeowners or renters insurance policy & check to see what their policy covers
For more information about obtaining Homesharing Liability insurance, call or stop by any one of our 9 convenient locations.
https://www.allstate.com/tools-and-resources/home-insurance/home-sharing.aspx
http://www.naic.org/documents/consumer_alert_home-sharing.htm
http://www.propertycasualty360.com/2015/03/31/6-things-to-know-before-signing-up-with-a-home-sha
