Do You Need Home Sharing Insurance?
Dan Levenson July 20, 2020
As the world changes, new types of insurance become necessary. One example is home sharing insurance, something that you should seriously consider if you let strangers stay in your home through services such as Airbnb, HomeAway or others. Without this type of insurance, you could find yourself unable to pay for damages or lawsuits that could occur due to unforeseeable circumstances. Let’s look at what home sharing insurance is and why you may need it.
The Dangers of Home Sharing
Many people today are looking for ways to earn extra money from their homes. Services such as Airbnb have grown quickly. At the same time, most of the hosts on these services aren’t knowledgeable about the legalities of their new business. One of the first matters you need to consider before renting out your home is insurance.
It’s important to realize that your legal relationship to Airbnb (or other) guests is not the same as it is to traditional renters. When tenants sign a lease, for example, they agree to certain responsibilities such as keeping the home in good condition and maintaining certain items such as appliances. Airbnb guests, however, are closer to hotel guests in that they don’t bear the same degree of responsibility. Because this type of home sharing is so new, laws and regulations are still catching up. In the meantime, Airbnb hosts and other users of home sharing services may be liable for a number of issues.
- Guests may damage your home. They could start a fire, damage walls or furniture, break windows, etc.
- A guest may be injured while staying at your home and could sue you.
- A guest could steal something from your home. In the case of a home where you have multiple guests, it could be hard to identify the culprit.
- Your rental area could sustain damage because of a natural disaster or other event not directly related to renters.
Does Your Existing Insurance Protect You?
You may assume that your homeowner’s insurance will cover any situations involving home sharing. Unfortunately, most of these policies don’t cover damage done by renters or injuries they may sustain in your home. Nor can you rely on landlord insurance as being an Airbnb host is not the same as being a traditional landlord. The legal status of home sharing is still uncertain and laws governing such arrangements vary by location. Insurance policies such as homeowner’s and landlord’s insurance are created with home sharing arrangements in mind.
What about insurance offered by home sharing sites themselves? If you use Airbnb, you’ll notice that the site offers a certain amount of free protection to hosts, Host Guarantee and Host Insurance programs. As Plaintiff Magazine points out, however, these programs provide limited coverage. Just one example is that you aren’t covered if guests are injured when arriving earlier or overstaying. There are actually many situations where home sharing falls through the cracks and isn’t covered by the usual insurance policies. That’s why you need a policy that’s specifically designed for home sharing.
What is Home Sharing Insurance?
When insurance companies devised plans such as homeowner’s insurance, they weren’t thinking about not-yet-existing practices such as home sharing. Now, some insurers are getting up to speed and creating home sharing policies that are specifically designed for this practice. When researching insurance policies, you need to consider your particular needs. You want to make sure that the policy covers as many scenarios as possible, such as:
- Property inside and around your home that could be damaged or stolen.
- Injuries sustained on your property by guests.
- Damages that occur even when renters aren’t physically present.
- Damages or crimes committed by non-renters. For example, if a renter invites another person into the residence, and he or she breaks something.
These are some possible situations that traditional insurance policies may not cover if you’re involved in home sharing. Finding a thorough home sharing insurance policy is the best way to protect yourself and your property.
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