Have you joined in on the home-sharing experience? Many are choosing to rent their homes for extra income. Travelers like the other-than-another-hotel experience.
Experts are predicting home-sharing will increase from last year’s 19% to 25% this year. Though an easy way to receive revenue, it’s important to know what additional insurance coverage you will need if you choose to pursue this new trend. Global risk solutions provider Assurant recently conducted a survey and found that many homeowners are not aware of or are prepared for the potential risk.
Property Casualty 360 states that “First and foremost, homeowners must understand that most insurance companies will deny claims related to home-sharing based on the commercial-use exclusion clause in the homeowners’ policy. But different companies approach the exclusions in different ways. For example, some policies indicate that ‘occasional home-sharing’ is allowed without really defining what that means.”
Know your coverage
“Occasional home-sharing” is an extremely vague statement, and one that must be discussed with your agent. Since insurance companies have different coverages, it’s imperative that you discuss your intentions with your agent. Property Casualty 360 stresses the areas where there might be gaps in coverage are:
- Damage to a neighbor’s property.
- Property theft of your belongings, such as jewelry, electronics and other valuables.
- Identity theft from stolen passports, birth certificates, other legal papers, or laptops.
- Liability for personal injury to guests.
Customize your policy
When discussing your policy, it is suggested that you customize your coverage to fit your needs. For example:
- If you are only renting out a home seven nights a month, then only seven nights of coverage is needed.
- Condominium coverage will most likely differ from a single family home.
- If your home-sharing is for meaningful revenue generation, a policy that will reimburse lost revenue due to guest damage is imperative.
In addition to having the correct coverage, it’s wise to have a thorough inventory of your belongings. It will be difficult to remember all of the items stolen, so the inventory documents will help you file your claim quickly and thoroughly. Serial numbers will enable you to identify your items if they are recovered by the police.
An added service by many home inventory professionals is a structure inventory. These photos will show the condition of your home prior to renting it, thus being able to show the damage created by a guest.