by: Janice Beighey

Home Sharing Insurance

Every now and then, finding a way to bring in a little extra money can make a big difference, especially during these times of uncertainty. Many of our neighbors are opening their doors to home sharing opportunities such as Airbnb, which are becoming increasingly popular. However, home sharing can also leave you financially vulnerable. If your renter starts a fire and damages your property or is hurt while renting your home, will you be protected?

Standard homeowners and renter’s insurance policies are designed for personal risks, not commercial risks.  As city/state governments have developed guidelines and ordinances around home sharing, insurance companies continue to established coverages to protect homeowner on a personal property policy by endorsing existing policies with appropriate coverages, but there may be exclusions and limitations, so read the policy carefully.

When Home Sharing Is a Business

If you are renting out part of your home on a regular basis to generate income, the insurance company generally views that as business activity, which is not covered by a homeowner’s policy. Instead, you’d need to purchase business insurance.

If you’re planning to rent the entire home for an extended period of time, you’ll need landlord insurance, as well. Landlord insurance covers the home itself as well as any structures that are on the property, such as a garage or shed. These policies typically cover you for losses such as fire or wind damage, but they will not reimburse you for damage caused by normal wear and tear or for the loss of your tenant’s personal property.

If you are doing the renting

If you are the one using a peer-to-peer network to rent a space from someone else, check your own homeowners or renter’s insurance policy. In most cases, if your personal possessions are stolen or damaged off-premises, you can simply file a claim with your own insurer. And if you accidentally injured someone, you should also be financially protected.


The Bottom Line

It is vital that you do your research before jumping on the home-sharing bandwagon. If you are renting out your home on a consistent basis, for example, your insurance company could drop you as policyholder if it considers that to be business activity. Even if you are renting your home just once, you cannot afford to jeopardize your coverage. Talking to your insurance company about what is and is not included in your policy can help you determine what is needed to fill the gaps.


Investopedia: Home Insurance

Insurance Information Institute