Real Estate

Homesharing Nightmares: Are Airbnb and Other Hosts Protected by Homeowners Insurance?

You probably never stopped to consider whether your property insurance would cover property damage or liability claims caused by someone who is renting your home. Why would you do it? After all, the last thing on most people’s minds is how an insurance policy will respond to some unknown future loss.

Shared housing services such as airbnb Y Far from home they have turned many ordinary owners into part-time innkeepers. The Pew Research Center found that 11% of American adults have used shared housing services. airbnb It alone boasts of having over 3 million listings worldwide.

This means that an increasing number of you actually Need stop and consider if claims involving renters are covered by your homeowners insurance. Unfortunately, the excitement and opportunity created by new business models make it all too easy to overlook the downsides.

That said, there is forever Down. For example, homestay owners face increased exposure to:

  • Damage or loss to personal and structural property.
  • Criminal activity, theft and vandalism.
  • Liability to guests for property damage or bodily injury occurring on the premises.
  • Liability to third parties for material or bodily damage caused by guests.

This brings us back to our original question. Does a standard homeowners insurance policy cover damage and liability claims involving renters?

You shouldn’t be surprised to learn that standard homeowners policies don’t directly address home sharing. After all, today’s sharing economy didn’t exist when most of these policies were written. However, there are some traditional provisions in standard policies that may limit or exclude coverage for the host homeowner.

  • Eligibility. Standard policies are usually restricted to homes that are used exclusively for private residential purposes.
  • Damage to property. A landlord’s personal property that is stolen from areas that are rented out to guests is generally not covered by a standard policy. Neither is the theft of a guest’s personal property. Standard policies may also limit coverage for some expensive items located in areas that are rented to others, such as appliances, rugs, and home furnishings.
  • liability coverage. Host owners may not think of home sharing as a business, but insurance companies may not agree. This can be a problem because standard policies generally do not provide liability coverage for home-based businesses.

Although not expressly mentioned or excluded, losses suffered by homestay owners may end up not being covered by their standard insurance. Gaps in coverage are common when old school insurance meets new school behavior. These gaps can also be financially devastating.

Until the insurance industry can catch up with the from uber Y by airbnb around the world, potentially significant coverage gaps are likely to remain for home-sharing hosts. In the meantime, if you are or plan to become a homestay owner, you should carefully review current policies to identify potential gaps in coverage. If you are unsure, you should consult an experienced insurance agent.

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