Maybe you’ve got a property you’re not living in anymore but don’t want to sell. Maybe you’ve got extra room in your own home or you travel a lot and want to earn some extra cash from your empty space. Home sharing websites like AirBnB and HomeAway have caught your attention. You know people who make good money by renting out their home or a room, and you like the sound of extra cash.
Do you need special home sharing insurance or will your standard Charlotte homeowner’s insurance policy cover you?
What Your Homeowner’s Insurance Does and Does Not Cover
If you plan on renting out your home one time, for a special occasion, your homeowner’s insurance might cover you. Every insurer is a little different, and they all have their own requirements. You may need to give advanced notice to your insurer or you might have to buy additional insurance, known as an add-on or endorsement, for the time you have a renter.
Even with this one time renter, your homeowner’s policy likely won’t cover certain issues.
- Damage done to your property by paying guests or renters
- Theft of your property by a paying guest or renter
- Damage to the guests’ property that occurs in your home
For multiple rentals or anything longer than a few months, even if you only have one renter, you’re going to need business insurance.
Insurance for Home Sharing
Depending on the type and length of home sharing you’re going to do, you have a few options for insurance coverage.
Endorsement or add-on: This extra coverage is added to your homeowner’s insurance policy for a one-time, single rental that occurs in your home. It will temporarily increase your liability and property damage coverage. Your deductible and premium will likely increase at the same time.
Hospitality and hotel insurance: You need this if you plan to home share multiple times throughout a given year for short durations. You’ll have property and liability protection, coverage for medical expenses for renters and legal expenses if you’re sued. Some policies also offer short term coverage for the loss of income expenses if you suffer damage that reduces your ability to rent your property.
Landlord insurance: You’ll need this if you plan to have long-term renters, typically six months or longer. It provides coverage for property damage for renters, liability coverage if there’s an accident, property damage to your home, and it may even coverage your personal property that you allowed the tenants to use.
Umbrella policy: Regardless of the type of additional coverage you need, you should also consider an umbrella policy. This insurance will protect you if claims exceed your insurance limits and, in some cases, help pay for damage or losses not covered by your insurance policy. It’s an extra layer of protection that’s needed when you allow strangers in your home.
If you’re jumping into the home sharing economy as a way to make money, good for you! Hopefully you’ll have plenty of success. Protect yourself and your home with the right insurance policy first. As any landlord can tell you, not everyone will treat your home with the same care you do.
Before you post the first ad on AirBnB, give us a call at Charlotte Insurance so we can go over all of your home share insurance options.