Do you have a second home or vacation home that you think would make a great part-time rental? While the idea of renting out your home when it’s not in use may sound easy, there are a few important insurance factors you should take into consideration before you create an Airbnb profile. Reviewing your home insurance coverage annually is always a great idea, but it’s a must before you rent out your home to guests. In fact, there are many potential insurance implications you should consider before you take the leap!
Does Your Home Insurance Cover Short-Term Rentals?
There are a variety of different rental scenarios that may be tempting you to put your home up for rent online. But it’s important to keep in mind that many standard home insurance policies may not extend coverage to any losses that are incurred while your home is rented out. While specialized policies may be available, they could be pricey, so it’s best to explore your options before handing over the keys to your second home.
Another popular vacation or short-term home rental option comes from companies like Airbnb or VRBO. With these types of programs, homeowners may be given a false sense of security with Host Protection Insurance that is included when you sign up. This type of insurance promises to become the primary insurance source when renting out your home by providing liability coverage. However, there are certain limitations and exclusions under this type of coverage as well.
What Are My Additional Coverage Options?
While homeowners insurance will likely cover short-term rentals if you choose to rent your home out for a single occasion if you plan to rent it out multiple times you may need a different type of coverage. It’s best to ask your independent insurance agent about options for landlord insurance or even business insurance to protect your home and other assets better.
For example, if you are interested in renting out your home for shorter periods of time but on an ongoing basis, you may be considered a “small business.” But if you want to rent out your home for a longer period, say six months to a year, you may be better off investing in a special landlord insurance policy.
Who Is Responsible for Renter Injuries or Accidents?
Accidents can happen in the blink of an eye, and even the most respectful renters may find themselves dealing with an injury after an accident on your property. Common accidents like a slip and fall on the stairs can turn into a real headache if your renter decides to file a lawsuit claiming that your negligence caused the injury. While Host Protection Insurance may help to cover your legal costs, it is always best to speak with your insurance agent before renting out your property.
Other Rental Considerations
Even if you have your insurance considerations taken care of and feel comfortable renting out your property to new tenants, there may be other factors to consider before getting started, including:
- Have you spoken to your neighbors? How do they feel about the possibility of new neighbors every few days or weeks?
- Does your condo or homeowners association allow subletting?
- Renting to strangers can be risky. Have you recently put money into remodeling your home? Are you prepared to possibly lose out on that investment due to renter negligence?
Contact Killey Insurance Today
Before you rent out your second home or vacation property, make sure you have the proper home insurance coverage to protect your assets and your renters in the event of an accident.