Renting your home through a rental service like Airbnb or VRBO may be a way to make some extra money. However, it can also be a risky business. In fact, many insurance agents would warn their clients against using these rental services. However, if you decide to list your property on one of these services, you need to know whether insurance will cover your property and how much coverage applies.
Understanding Insurance Coverage
Some rental services, such as Airbnb, may provide primary insurance coverage for your property when it is being rented through the service. However, these insurance policies are usually subject to specific conditions, exclusions, and limitations that leave you exposed to risks. If you sustain a loss that isn’t covered by this insurance policy, you may lose money.
Some home insurance policies may also provide coverage for your property when you rent it through a service like Airbnb. However, it is important to note that every insurance company is different. The level of coverage provided for homeowners who rent a property using an online service may vary by company. Coverage may also vary by state. Furthermore, some home insurance policies may not provide any coverage at all in these scenarios.
In addition to standard insurance, a homeowner who regularly rents out an investment property or vacation home needs specialized coverage in the form of a landlord or rental dwelling policy.
Without a careful review of insurance coverage, gaps are almost inevitable for owners of rental property. For example, if you rent your property through Airbnb and you rely on the company’s policy to protect you from loss, you will be exposing yourself to a high potential for loss. Airbnb’s policy will not protect your personal property, which includes your furniture and electronics. If renters damage or destroy these items, you will have to pay to repair or replace them on your own.
Insurance coverage isn’t the only issue to consider when you are thinking of renting out your home or vacation property through a service like Airbnb. For example, it is important to think about how your neighbors may react to your decision. If your neighbors live in their homes on a permanent basis and don’t take on any renters of their own, they may be uncomfortable having different families coming and going on a regular basis. Managing rental property can also be overwhelming, as you will be responsible for cleaning up after previous guests, performing maintenance and making sure your property remains in good condition.
Deciding whether you list your property on Airbnb requires some in-depth thought and careful consideration of all of the implications. If you decide you want to list your property, keep in mind that making sure you have proper insurance coverage is essential. Before you list the property, spend some time talking to your insurance agent.
At Main Street Insurance, we understand the insurance needs of rental property owners. Please contact us today to discuss your situation.