Renting Your House With Airbnb? Make Sure You Are Insured ProperlyPosted on Aug 05, 2016
Are you renting out your home through Airbnb? It’s tempting to put your empty home to work earning money for you. Or even a room recently vacated by a college-bound student. Just be sure, before you dive into an agreement, that you have the right kind of insurance to protect your family should something go wrong.
Organizations such as Airbnb offer a great service to society. However, they are not without their caveats. The problem with organizations like Airbnb is that they’ve created a sort of grey area when it comes to insurance.
The home, in this instance, is no longer simply your dwelling – the place where you and your family reside. Once you rent out your home, or even a room in your home, you’re engaging in a business transaction. The home is then a business in the eyes of some insurance policies.
Even that is poorly defined. Is your home then considered a hotel? Do you need hotel insurance? Or are you considered a landlord or property manager? The shorter the rental, the bigger the risk many insurers believe it to be. And the agreements vary widely across the field.
Doesn’t Homeowner’s Insurance Cover Guests?
Your guests are covered for the things you are insured against. This includes many types of liability coverages. The problem is that a guest in your eyes may be a patron, customer, or client in the eyes of insurance companies. This means you’ll need to invest in business insurance in addition to your homeowner’s insurance, in order to have full insurance coverage to protect your investment in the property.
That is why it’s important to work with an insurance agency you can trust, like Otterstedt Insurance Agency, to deal honestly with you and work to find you the right coverage for your home – especially if you’re considering using Airbnb to rent out rooms or your entire home.
What about Host Insurance from Airbnb?
Airbnb offers all homeowners “host protection” for up to one million dollars. The coverage extends to accidents, such as slips and falls and other injuries that occur on your property. This coverage serves as a primary coverage, meaning that other insurance you have for your home and/or business will kick in once these funds are exhausted.
The Airbnb policy does not, however, provide protection for homeowners in the event that jewelry or rare art and similar expensive items are damaged, destroyed, or stolen by guests. If you have antiques, expensive electronics, or other valuable items in your home, discuss your situation with your insurance agent to determine if you might need additional protection for these items when your home is occupied by guests.
Is Room or Home Sharing Inherently Risky?
Any time you allow someone to come into your home you are taking a risk. The risk is even bigger when you aren’t there to monitor the situation and make sure everything is in tip-top shape. Add to that the fact that people are not as careful with your property as they may be with their own, and there is potential for damage, accidents, and injuries. Without the right coverage you, and your family, can be on the hook for any damages that are awarded or the loss of property you may experience.