There are numerous reasons homeowners in Wisconsin may want to rent out their homes or part of their homes to vacationers, business travelers, and other guests. The most-used platforms for these types of rentals include Airbnb, HomeAway, and VRBO.
While the idea may sound good to you, remember to consider the insurance implications of such an endeavor as well. In the following article, we’ve outlined some of the key questions you’ll want to ask yourself if you plan to move forward with home sharing:
Is Home Sharing a Good Idea for You? Ask Yourself:
Will the hosting platform offer insurance?
Yes, most of the time, hosting platforms such as Airbnb will provide some type of insurance, and you’ll pay for it through mandatory fees with each rental transaction you make. However, this insurance is limited in its coverage.
Airbnb’s insurance, for example, is called Host Protection Insurance. But it does little to protect you. Generally, it is liability insurance that protects you against third party claims of bodily injury or property damage. While this can be helpful, Host Protection Insurance will not cover you for things like damage to your building or belongings. There are some options for getting partial added coverage for things like this through Airbnb, but it comes with an additional charge.
Will my homeowner’s insurance protect me?
Most of the time, home insurance will not cover claims you make when you have a paying guest staying in your home. That’s because insurance companies see these situations as high risk.
Moreover, even if your insurance company will cover you once or twice while you have guests (usually only after you purchase an additional rider to add to your home insurance policy), you must notify them first. And if it becomes a regular occurrence, it’s unlikely they’ll continue covering you.
You also must remember that all insurance policies are different. The bottom line is that you should never assume your home insurance will cover home-sharing platform guests.
Can I purchase additional insurance to make up for coverage gaps?
Additional insurance such as business insurance, landlord insurance, or rental dwelling insurance will certainly be able to cover you — if you’re prepared for the cost. Again, you’ll want to speak to your local insurance provider to see which policies will be right for you.
Finally, remember that home sharing is not a simple venture. While it may appear to be a quick avenue to easy cash, it comes with a lot of responsibility, planning, and expense.
Not only will you need to be present (or hire someone else to be present or nearby) during the times in which you have people stay on your property, but you’ll also need to clean in preparation for your guests and after they leave. Unfortunately, this may entail deep cleaning as — just as in hotels and resorts — guests don’t always leave their rentals neat and tidy.
If you live in a homeowners association or condominium, it’s also possible you may run into some walls with bylaws that prohibit the rental of your home. It’s wise to double check with your association board or manager before moving forward. Even if you don’t live in an association, if you have close neighbors, you might want to check with them as well.
Your Insurance Provider Can Lend a Helping Hand
Leonard Insurance is here to help should you have questions related to home sharing. Remember that whether you’re gung-ho about renting out your place or still debating the pros and cons, your first step should always be to discuss insurance coverage options with a knowledgeable agent.