If you have guests in your home, you’ll want your insurance coverage to extend to them. So, if they were to have some sort of accident, your policy might be able to help them get assistance. However, having a friend stay in the home is a lot different from having a paying guest. If you plant to rent the home on a short-term basis, like through a service like Airbnb®, you might need to change your insurance coverage. A standard homeowners policy might not help you for paying guests’ losses. Here’s why.
Embarking on a home-sharing venture is a business transaction in many cases. Therefore, if something happens, a standard home policy might not be able to help you. Talk to your insurance agent if you plan to take these steps.
Insurance for Short-term Rental Owners
Having paying guests stay in your house overnight, like through a home rental company, has helped millions of Americans make a little extra money. Many people think that it is very easy to sign up for a service and then host visitors. However, it is not the same thing as simply having a friend visit.
Having a paying guest is like running a business. Therefore, you have to meet certain safety regulations, and also treat them respectfully. One of those courtesies is to make sure you have insurance on the property. It will provide a degree of protection in case a client sustains harm in the house.
Nevertheless, there is a catch. Because this is a business venture, you might need to make adjustments to your insurance coverage.
- Some home-sharing companies will provide a supplementary insurance package for the risks associated with your venture. For example, Airbnb® can provide what it calls Host Protection Insurance to insure the homeowner against liabilities the homeowner faces. You can buy this coverage in addition to your standard homeowners insurance.
- To extend your home policy to a sharing venture, you might be able to add a policy endorsement to your standard policy. That coverage can better guarantee that you have protection in case a guest sustains harm in your home.
- Home insurers might consider the home-sharing practice an official business venture. Therefore, you might have to buy business insurance of some degree for the home-based operation.
To determine the best course of action for you and your home, call your home insurance provider. They can tell you about any existing stipulations in your policy. The one thing you should not do is try to hide from your insurer that you have a home-sharing operation. If you do, you might leave yourself exposed to coverage lapses, and even exclusions, should an accident occur. Have a policy in place before you sign up for the service.