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Do I need special insurance if I’m renting out my home on Airbnb?

July 8, 2015

Are you thinking of getting into the new travel trend by joining millions of people around the globe renting out rooms in their homes through the websites HomeAway and Airbnb?

The lure of Airbnb is that travelers from around the world can rent out a room in your home for a week or two at a time so they can “live like a local.”  It’s a perfect set-up for empty-nesters and retirees or families looking for a cultural experience for their kids.

Before you take in a renter, it’s important to review your homeowners policy because it may not protect against liability. In some cases you may need a special insurance policy, depending whether you’re home while renting your home and how often you rent it.

Isolated keys with Rental tag.

Rentals on Airbnb are considered short-term. And that might be a problem. If you’re renting a room or your house on a short-term basis, say two weeks at a time, you’ll probably need a special policy. Why? Because your short-term rental could be considered a commercial enterprise like a hotel or bed and breakfast, and your renters  become “guests”.   You might need to buy business insurance or a special landlord policy. An umbrella policy for an added level of protection might be a smart move because being a landlord increases your risk of a lawsuit.

Another rental scenario that may need a special policy is when you rent out your home for long periods of time when you are not home. Say, you live in a hip part of town and want to rent out your house to a college student during the summer while you’re away. Your homeowners insurance may not be enough if you turn your home into an annual rental property.  A special landlord or dwelling policy would cover you for damages to your home caused by natural disasters or a fire.  It also covers legal fees and medical expenses if your renter gets hurt in your home.

Before you rent out your home for any period contact me at ppatrone-onofrio@foundersgrp.com. I can help make sure that you have the proper coverage.

Patty Patrone-Onofrio

Personal Lines Account Manager – Founders Insurance Group

www.foundersgrp.com – 860-482-3506

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