The Hidden Risks of Home Sharing

As spring break nears, many individuals and families will be heading out for vacations all over the country, and sometimes out of the country too. Many homeowners and vacationers turn to home sharing rather than the traditional lodging options. Home sharing has grown in popularity in recent years, allowing homeowners to use their homes to generate extra income, and giving travelers unique lodging experiences. Home sharing services like HomeAway, VRBO and Airbnb provide a platform that matches users who are looking for a place to stay with homeowners who have space available that they are willing to rent. Typically the space is some type of home – such as a house, condo, apartment or cabin – but can be anything from a guest house on the owner’s property or an extra bedroom to a couch in the living room.

Home Sharing Insurance Risks

Many homeowners that participate in a home-sharing service are under the impression that they are covered either by their insurance or the home sharing platform’s insurance, but that is not always the case. A 2017 vacation rental owners survey shared some surprising findings on how little homeowners knew about liability with vacation rentals and home sharing. Almost two-thirds (63%) of the more than 1,000 homeowners that took the survey were not sure if their homeowners’ policy covered vacation renters, and more than half (55%) noted that they simply have no idea who is responsible or liable if something goes wrong.

Not all home-sharing companies provide coverage for damages, and using a home as for income is typically not covered by the homeowners’ insurance policy either. According to Robert Hartwig, president and chief economist at the Insurance Information Institute, renting out all or part of a house on a regular basis is viewed by insurers as a business arrangement. He adds, “If one of the renters damages or destroys the house, standard homeowners insurance will not apply.”

Some homeowners may not be as concerned about damage to their property, but even more troubling is bodily injury liability in the event a renter or guest injures themselves on the property. While a homeowners’ insurance policy covers bodily injury liability for visitors to the house, it typically does not include a situation where the owner is renting the property to generate income.

In both cases, the income generated by home sharing is what voids the homeowners’ coverage. This can leave a huge gap in liability and property damage coverage, so it’s crucial for insurance agents to ask homeowners’ if they have or may consider using their home for this purpose. Agents should explain the implications of home sharing on their clients’ homeowners’ policies, and try to offer solutions tailored to meet their needs.


About The Insurance Store

The Insurance Store was created to bring ease and agility to Surplus Lines coverage placement for agents serving commercial and personal lines clients in specific regions throughout the country. We provide a wide variety of packages for hard-to-place products and risks that include earthquakes, floods, hail, and more. To learn more about how we can protect you in the event of an unforeseen event, contact us today at (425) 313-9605.

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