Some platforms help match hosts and guests in what has been termed house-sharing arrangements. Most people have heard of Airbnb, the largest of these kinds of companies. A couple of other active sites include Homestay and Couch Surfing, but there are dozens more. While these companies have helped arrange hundreds of millions of bookings, most of them successful, some hosts have wished they had done more to protect themselves. Continue reading to learn about some common pitfalls and the steps you can take to protect yourself.
How Homeowners Insurance Policies Works for House-Sharing Hosts
Airbnb says right on the website that their insurance will sometimes provide primary insurance but is subject to limitations, conditions, and exclusions. Even the company doesn’t suggest relying upon the coverage that they include with their services. Airbnb advises guests and hosts to speak with their homeowner’s insurance agent to understand how and even if their policies will protect them.
Some policies protect homeowners or renters against losses from guests, but they might have extra limitations or exclusions for paying guests. In fact, some house-sharing hosts said they had their policies terminated with their insurer when they learned that they had opened their home to guests, even if they did not make a claim. Hosts should not begin renting until they let their insurer know that they are conducting this sort of business on the covered property.
Insurance companies may ask the policy owners to extend their coverage to include this sort of business use. A few insurers even offer specially tailored, month-to-month policies just for house-sharing hosts.
Other Protective Actions House-Sharing Hosts Need to Consider
Besides insurance, hosts need to investigate some other impacts of offering their property to paying guests. Consider these important examples of things to consider:
- Local regulations: A few major metro areas have been imposing additional rules on house-sharing hosts because they want to collect taxes, limit a possible drain on real estate, and help promote safety. A penalty for violating these rules can cut into profits quickly.
- HOAs, COAs, and property managers: Many hosts own their properties, but some simply offer an extra room or even a sofa in a rented house or apartment. Either way, hosts should make sure that they don’t violate any of the terms of their neighborhood association or lease.
- Safety measures: Hosts should have basic safety measures in place, like smoke detectors, fire extinguishers, and clearly displayed emergency contact numbers. It’s also a good idea to post house rules, limit occupancy of rental units, and take some extra steps to make sure guests understand what to do and how to behave.
People who plan to rent frequently might consider home security systems that can offer extra protection to renters and hosts. Hosts who plan to rent properties that they don’t occupy might also consider keyless entry systems because they allow owners to set and revoke entry password codes electronically. Some of these systems can also protect off-limits areas of a property that rental guests aren’t entitled to enter.
Who Can Help You Plan for Protection When You Rent to House-Sharing Guests?
Like countless other small businesses, you can rely upon an experienced insurance agent at Wheaton Insurance to help you minimize risks with the right kinds of protection. Not only will we help you find the coverage that you need to protect yourself against losses, we can also suggest other ways to minimize risks. Very often, many of these protective measures can also help you earn discounts on property insurance.