Renting your home or vacation property on VRBO or Airbnb can help you boost your income. However, this practice can also expose you to risks if you aren’t careful. Before you decide to list your property with one of these services, consider each of the following issues.
1. Your homeowner’s insurance coverage may be limited.
Many homeowner’s insurance policies will cover certain types of events for homeowners who rent out their properties online. However, this coverage often comes with multiple exclusions. Homeowner’s insurance policies vary by carrier and by state, so it is important to read your policy carefully so you can understand exactly how it will apply if you decide to list your home for rent.
2. The coverage provided by the online listing service may not be enough.
Online rental listing services like Airbnb and HomeAway generally provide some amount of primary insurance coverage for clients who choose to list their properties for rent. However, these policies are unlikely to provide all of the coverage you need to protect yourself properly. For example, Airbnb offers Host Protection Insurance, which offers a maximum of $1 million in liability insurance for homeowners. However, this coverage does not extend to any claims or losses that are not related to liability.
3. You may need to purchase a landlord or rental dwelling policy.
If you are renting out your property on a regular basis, you may need to purchase a landlord or rental dwelling insurance policy to protect yourself. Talk to your insurance agent to find out whether this type of coverage is necessary for you.
4. Listing your property as a short-term rental could lead to other problems.
Insurance coverage isn’t the only issue to consider as you prepare to use your home as a rental property. You should also consider the other ways in which this decision could affect your life. For example, if your renters make a big mess in your home, you need to have a plan in place to clean it up. Your insurance is unlikely to cover any cleanup fees, so all of these expenses will come out of your pocket. In addition, if you are part of a condo or homeowner’s association, you may need special permission to rent out your property, or you may be unable to rent it out at all. Likewise, if you have neighbors who don’t rent out their own properties, they may not be happy with your decision to accept short-term renters.
5. You need to speak with your insurance agent.
Before moving forward with your plans to list your property for rent online, you need to conduct a thorough review of your insurance coverage. Make an appointment with your insurance agent to make sure that you have all of the protection you need.
Stauffer-Klug Insurance understands all the complexities of insurance for short-term rentals. Please contact us today to discuss your needs.