Know Your Insurance Coverage Before Renting Out Home

Home sharing has become popular as homeowners in areas near seasonal festivals and events discover a ready source of additional income in short-term rentals. Before renting out your home, it is important to find out if your homeowners insurance policy will cover such arrangements.

Most policies provide coverage if a visitor falls and is injured in your home, but the typical policy may not provide coverage if the visitor is a paying guest. Also, your policy will generally cover your home or personal property for damage caused by guests but may not cover some losses such as theft.

“If you’re considering renting out your home, talk to your insurance agent first,” said Insurance Commissioner David Mattax. “Make sure you understand the risks and how you can protect yourself.”

What is home-sharing? Home-sharing is an arrangement between homeowners and guests to rent a property for a short period of time, often by using an app or a website.

What are the risks to homeowners? Both hosts and guests could incur costs if the property is damaged or someone is injured in the home during a rental. As a host, your homeowners, condo, or renter’s insurance policies are not designed to cover accidents arising from property rental and may exclude or limit such coverage. Ask your insurance agent or company if your policy includes coverage for paying guests in your home or about other coverage options to make sure you’re protected.

How can I protect myself as a guest? As a paying guest under a homesharing arrangement, your own homeowners, renter’s or personal liability insurance policy will generally protect you if you happen to cause damage to a host’s property. Know your coverages before you rent. If you are renting through an app or website that offers insurance coverage, ask your insurance agent if you need that protection.

(Reprinted with permission of The Insurance Record)

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