Home sharing and your homeowners policy

What is home sharing?

There are many types of innkeeper businesses that have been in operation since the beginning of time. Peer-to-peer network agencies such as Airbnb, Vrbo, and HomeAway have taken the traditional bed-and-breakfast concept to a new level of opportunity by connecting registered hosts with guests online. Accommodations can range from offering a single bed for the night to renting the entire house for a week or more.

How does this activity affect my homeowners insurance? 

Because this activity represents a for-profit business, it deviates from the personal risks contemplated by the premium charged for a homeowners policy. Consequently, your policy will, at the least, limit or exclude coverage for many of these lodging accommodations. In fact, most insurers now completely exclude home-sharing coverage in their standard policies and offer it only as optional buy-back coverage.

What are the buy-back coverages I can get on my homeowners policy?

Home-sharing host activities means renting all or part of your home to an occupant through the use of a home-sharing network platform. The following are typical coverages offered:

Coverage A—Dwelling

When renting to others your dwelling, or room, or apartment contained in your dwelling, there is no home-sharing restriction applicable.

Coverage B—Other Structures

When renting to guests a separate structure on your premises, there is no home-sharing restriction applicable.

Coverage C—Personal Property

There is coverage for property used primarily in home-sharing activities, but there is no theft coverage for money, securities, jewelry, watches, and furs. Appliances, carpeting, and other household furnishings in the rented space are covered for $3,000, but not for theft.

Coverage D—Loss Of Use

Not only is lost rental income covered when it results from covered damage to property used in home-sharing activities, but coverage is added for the cancellation of a home-sharing contract during a hurricane watch or warning (and 24 hours after it expires).

Coverage E—Personal Liability &

Coverage F—Medical Payments

To Others

Liability and medical payments coverages are provided for home-sharing activities. In addition, there is $5,000 coverage for the property of others when damage is caused by you without legal liability. This limit can be increased.

Personal injury protection

If personal injury coverage has been added to the HO policy, it also will apply to home-sharing activities.

Do the home-sharing agencies provide any coverage for me?

Many do provide coverage. For example, Airbnb’s AirCover can provide up to $3 million in property coverage and $1 million in liability coverage for hosts. In most cases, this protection is primary coverage and is provided at no cost to hosts. Of course, you will always want to examine the exclusions and limitations to ensure that you are covered.

What other coverages may be needed?

Beyond the home-sharing endorsement to the homeowners policy, you may need commercial insurance to cover all your exposures to loss. This includes workers’ compensation insurance and health insurance coverage for part-time or full-time employees. Our agency welcomes the opportunity to assist with all your home-sharing insurance needs. Please call us if you are planning on hosting paying guests in your home.