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front of houseMany homeowners are using homestay networks like Airbnb to rent out their homes. These sites allow owners to collect some extra cash while they are away on vacation by renting their homes to tenants.

It seems like a good setup for both parties. The homeowners get paid, and the visiting tenant doesn’t have to limit their vacation to a hotel room. However, does home insurance cover short-term rentals such as those associated with Airbnb stays?

Short-Term Rentals Increase Liabilities

Home insurance is a contract between the homeowner and the home insurance provider. Under the agreement, every party assumes that the owner will occupy their home continuously.

When a homeowner rents their home to a temporary renter who injures themselves during their stay, homeowners liability coverage may cover them. But, it may not be enough to cover the expenses associated with a lawsuit.

If you are considering renting your home, then you must make sure you have the right home insurance coverage before making an agreement with a short-term tenant.

Short-Term Rentals Are Business Activity

Offering a house for a short-term rental is a business transaction. As such, a home insurance policy will likely not cover losses stemming from negligence.

In most cases, home insurance excludes business activities inside a home. Again, the contract between the homeowner and the home insurance provider assumes homeowners live in their homes. It likely does not assume that they transact business there.

How to Get the Coverage You Need for Short-Term Rentals

If you are considering short-term rentals, you don’t have to forego profits to protect your home from liability risks. You simply need the right type of home insurance to cover the increased risks.

In most cases, your home insurance provider has a specialty home insurance policy that will cover your home when you are living in it and when you are renting it. To get the appropriate coverage, you must inform your insurance provider about your tendency to rent your home on a short-term basis.

Although many short-term rentals conclude without any problems, there is always a possibility that something can go terribly wrong while you are renting out your home. As such, you should take steps to protect your home before you begin renting it out to complete strangers. These insurance policies are specialty types of home insurance policies that will also cover your personal belongings.

If you are considering making extra money by renting out your home, give us a call. We can give you advice about what you can do to protect your home while you are away. We can also guide you through purchasing specialty home insurance.
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