Is home sharing covered by homeowners insurance?
Home sharing is when you rent out your home — or part of your home — to short-term paying guests. If you're considering renting out your home to a paying guest, for example, through a site like HomeAway or AirBnB, it's a good idea to consider the potential insurance implications.
Your first step should be to check in with your insurance provider to better understand whether your homeowners insurance policy covers home sharing. Here are some questions to consider:
Q: Does homeowners insurance cover short-term rentals?
A: Homeowners insurance may help cover short-term rentals if you're renting out your home for a single time (or occasion). However, if you plan to rent it out multiple times or for an extended period, you may need to purchase landlord insurance or business insurance to obtain coverage for your rental property.
Q: What type of coverage do I need if I rent out my home for a one-time event?
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get a quoteQ: What type of insurance do I need if I want to rent out my home multiple times?
A: If you're planning to rent your place for short periods but on an ongoing basis, some insurers may consider that a "business" and require you to purchase business insurance, according to the III. Other insurers may consider any rental of your property a business. If you plan to rent out your home for an extended period, such as six months, you will likely need a special policy like a landlord policy, says the III.
Q: Are a paying guest's belongings covered by my homeowners insurance policy?
A: Likely not. The personal property of a paying guest would not be covered by a typical homeowners policy. So, if a fire occurs while a paying guest is staying at your home, the paying guest would need to look to their own renters or homeowners policy to cover the loss of their own property.
Q: What if a paying guest steals my property during their stay?
A: You likely won't be covered by your homeowners insurance. There are typically exceptions on a homeowners policy for theft when the theft takes place in the part of a residence that is being rented to a paying guest. Some insurers may offer a homeowners insurance endorsement that helps cover your belongings in case they are damaged or stolen while you are a home-sharing host. Your insurance provider can tell you whether this type of coverage is available as an add-on to your policy.
Q: What if my guest injures somebody or causes damage to a neighbor's property? Does my homeowners insurance cover that?
A: Likely not. The liability coverage of your homeowners policy, which typically protects you from financial loss if you're legally obligated to pay for another person's injuries or for damage you do to their property, will typically not extend to a guest. So, if a paying guest was responsible for another person's injury or property damage, the paying guest would need to look to their own renters or homeowners policy for liability coverage.
Q: What if my guest damages my own property?
A: A standard homeowners insurance policy likely won't cover this type of damage. For example, if the paying guest knocks over and breaks a lamp while staying at your home, your homeowners insurance likely won't consider that a "covered peril." Additionally, because most homeowners and renters policies exclude property damage to a rental property, the paying guest may not have coverage through their own homeowners or renters insurance if they damage your property. You would want to make sure your paying guests have the capacity to pay for any damage they may cause to your property, or ask your insurance provider whether you're able to purchase additional coverage to help protect your property in case it's damaged by a paying guest.
Q: What precautions can I take as a home-sharing host?
A: First, talk with your insurance provider to understand what your existing homeowners policy may or may not cover. Ask what exclusions might apply. You might also consider requiring paying guests to have their own homeowners or renters insurance policy, which may help cover their own belongings as well as provide liability coverage in the event that they are found legally responsible for damage to your home.
Before you enter into a home-sharing agreement, be sure to do your research and take steps to help protect yourself against the unexpected.