New Exclusions Could Make Your Insurance Policy Worthless If You List Your Home Online | Airbnb, HomeAway, Flipkey
Renting out your property to seasonal guests can be a great way to earn additional income, but there are several pitfalls you must avoid to make it successful.
Before charging guests to stay in your home, you should consider the risks associated with it. For example, if a renter damages your property or if someone gets hurt during their stay, who is going to bear the legal and financial liability? More importantly am I covered if I list my property online on sites like Airbnb, HomeAway, or Flipkey?
Vacation Rental Insurance Agency Recommends, you speak with an insurance professional to find out what your current homeowner’s policy actually covers. In the last past year the Florida Department of Insurance Regulations approved policy language that has allowed one of Florida’s largest insurers to exclude coverage if your home is listed on a home sharing site. Other companies can now very easily add this language to their policies and it could have devastating consequences to you if you have a loss.
Q: If my home is listed on Airbnb, HomeAway or Flipkey how does this new exclusion affect me?
A: The exclusion that was added that excludes damage under section 1 of your policy state the following:
Home Sharing/Bed and Breakfast, including covered losses, on homes or condos or any part thereof, arising out of participation in home sharing or bed and breakfast program such as Airbnb, Flipkey, Homeaway, where homes/condos are rented for days, weeks or months.
In basic terms this mean that once your home is listed on one of these sites you know longer have coverage if your house burns down is damaged or someone is hurt or injured on your property.
Q: What coverage do I have if I only rent out my property for a single occasion?
A: Under the new exclusions your property is listed on Airbnb, HomeAway, or Flipkey or any other home sharing site you probably don’t have coverage regardless of how many times you rent it. VRI Agency has partnered with a select group of companies who don’t have this exclusion and will provide coverage for this type of activity.
Q: What happens if a paying guest steals my property or damages the home during their stay?
A: Once again, you are probably not covered. Most policies have exceptions for theft when the theft takes place in the part of a residence that is being rented to a paying guest. 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 the paying guests have the capacity to pay for any damage they may cause to your property and collect an adequate deposit.
Q: Am I covered if my guest injures somebody or causes damage to an adjacent property?
A: Your personal liability coverage most likely will not extend to a guest, so you may be legally obligated to pay for another person’s injuries or for damage to their property. Once again, the guest would have to rely on their own policy if they have one.
Q: How can I ensure the rental process goes smoothly?
A: Once you have thoroughly discussed your policy with Vacation Rental Insurance Agency and are satisfied with your coverage, conduct a thorough interview of any potential guests before they arrive. Have a screening service provide an overview of a candidate’s background. Ask for identification, do reference checks, and ask for a deposit (much like you would do when taking on a rental tenant as a landlord).