Especially if you live in a tourist destination and are a big traveler yourself, listing your home on Airbnb can be a great way to make some extra money while you’re away from home. In terms of insurance, here’s what you need to consider before renting your home on Airbnb or other short-term rental sites.
Many short-term rental programs like Airbnb offer host protection insurance, which provides primary liability coverage in the event of third-party claims of bodily injury or property damage. That said, their policy does not provide personal liability coverage for injuries, coverage in shared or common areas, coverage for injuries to pets, or coverage for cash or valuables.
While you’ll want to make sure to pay special attention to the conditions, limitations, and exclusions of these types of insurance, it’s also important to make sure short-term rentals do not go against your primary insurance coverage conditions.
Because renting out your home is considered business activity, some insurance providers might require you to purchase a specific commercial endorsement for coverage during the rental period. Check with your insurance provider before starting the rental process to prevent any problems that might arise during a claim.
Because short-term rental programs offer their own liability coverage, you won’t necessarily need an additional coverage from Grange. However, because short-term rentals do create a certain amount of risk and liability, this type of activity would be an underwriting consideration, which may prevent your home from being eligible for coverage.
In the event of a claim, the Airbnb policy or a comparable commercial policy would be your primary coverage, and your Homeowners insurance through Grange would be your secondary coverage. In this situation, your secondary coverage would be utilized only in the event of a covered cause of loss listed on the policy.
Before you get involved with a “sharing economy” business like Airbnb, be sure to talk with your independent insurance agent about what your policy covers in relation to home sharing and which insurance carriers are willing to provide coverage for these activities.
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