Have you heard about the latest trend in traveling? People are renting out their apartments and houses to travelers in exchange for some extra income. Travelers across the world are choosing to stay in people’s personal homes and apartments rather than staying in a hotel. The concept is called “Home-Sharing”.
How does it work? Well, if you decide to rent out your residence, you take pictures of the space and upload them to one of the many home-sharing websites, such as Airbnb, Roomarama or Homeaway.
You then create a profile and determine the parameters of your home rental, such as the length of the rental, price per day, etc. If a traveler decides they want to stay in your home, you are contacted by the site and the accommodations are arranged.
Easy, right? Well, maybe. Who are these people you are opening up your home to? What happens if they steal something or damage your property? None of the sites I researched ran background checks. One did require you to scan an ID, but that was it. I thought this was slightly frightening, and a quick search online confirmed my fears. I discovered quite a few terrifying guest stories. The tales ranged from guests that would not leave to homes being completely destroyed.
In addition to the possibility of a guest causing damage to your home, what happens if one of your “renters” is injured while staying at your house? For example, what if a paying guest falls and breaks his leg or a child drowns in your swimming pool? You could you be held responsible as the owner of the property.
Most homeowner’s and/or renter’s insurance policies consider this “Home-Sharing” to be a business exposure because you are now using your home for commercial purposes. Unfortunately, homeowner’s and renter’s policies have very limited coverage for homeowners who are running a business out of their home. It is a very real possibility that your insurance company could deny coverage for damage that your guests cause to your home in these scenarios. It is also unlikely that your insurance company would provide liability protection for you if you are sued by a paying guest who is injured on your property. As an insurance geek, this is very scary. Renting out your home without the proper insurance protection is dangerous and risky.
It’s always best to talk to your insurance agent before you decide to participate in home-sharing. If you are thinking about renting out your home for one of these home-sharing programs, give us a call. We can review your particular situation, your individual policy, and and then discuss with you what your options are.
If you enjoyed reading this, please subscribe to the Blog Edition of the Loiselle Ledger, the official newsletter of Loiselle Insurance. As a subscriber you’ll receive bi-monthly emails highlighting our latest blog posts. Subscribe Now.