AirBnB Introduces New Renters Insurance Challenges
If you own more than one home, you may have considered renting it out as a means of earning a bit of extra income. Home- and apartment-rental platforms like Airbnb and HomeAway have made it easier than ever before to list a property for rent, offering it to vacationers on a short-term basis. With the ease of becoming a rental host comes increased risks, however. Homeowners planning to rent out their primary or secondary homes must consider the protection afforded by rental insurance policies. In this guide, we’ll introduce rental insurance and illustrate how it can protect a property owner’s financial assets from the losses associated with liability claims.
Rental Property Insurance: Protecting Investments
Before delving into the world of property rentals, many property owners believe that their primary homeowners’ insurance policies are sufficient to protect their hard-earned investments. In some cases, an endorsement on the policy may be able to be obtained to provide coverage, but in general, homeowners’ policies do not cover losses and property damage in a rental scenario. A specialized form of insurance is needed, and this is known as rental property insurance.
What can rental property insurance do for the homeowner wishing to rent out a home, condominium unit, or apartment? Sometimes referred to as landlord insurance or “host” insurance, these policies help to mitigate liability risks by protecting the property owner from claims, such as when an Airbnb renter sues or becomes injured while staying in the rental property. Host insurance policies typically also cover property damage or losses of property. In some cases, rental property insurance policies may even help to replace lost rental income if the rental unit becomes too damaged to rent out due to a loss covered by the policy terms.
What rental property insurance policies generally do not cover are the tenant’s possessions; these policies are designed to protect the property itself. Some policies may contain protection for certain items owned by the landlord, particularly for items left in the property for the exclusive use of renting tenants. These items may include lawn and garden equipment, home appliances, and furniture. Tenants staying in a rental property should obtain renters insurance from a qualified insurance carrier.
Rental Property Insurance Scenarios
For Airbnb purposes, a property owner rents out his or her home or apartment for a short period of time, such as in one- or two-week blocks. This is a short-term rental, and if the rental property is also the owner’s primary residence, some homeowners’ insurance policies may cover property damage or losses, provided the insurance company is notified beforehand. Other policies may require a specific rider or endorsement to provide short-term rental insurance coverage. One potential concern is this: for short-term rentals done on a regular basis, such as through Airbnb, the insurance company may see this as a business activity and refuse to cover damage or losses. In these cases, a rental property insurance policy is critical for protecting property investments.
Longer-term rentals, such as renting out a home for a year or more, almost always require a separate rental property insurance policy. These policies may be obtained from insurance firms across the country; if you’re ready to start renting your property through Airbnb, speak to your insurance agent today to determine what type of policy you’ll need to protect your property, your financial assets, and your peace of mind.