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Understanding Insurance for Home-Sharing: Protecting Your Property
With the rise of platforms like Airbnb and VRBO, more homeowners are exploring the potential of earning extra income by renting out their homes. While this can be a lucrative opportunity, it’s crucial to understand how your homeowners insurance policy is impacted by home-sharing activities. At Select Source Insurance Group, we want to ensure you are fully informed and protected. Here's what you need to know.

Does Homeowners Insurance Cover Short-Term Rentals? 

Most standard homeowners insurance policies are designed to cover typical risks, such as damage from fire, windstorms, or personal liability if someone gets injured on your property. However, short-term rentals are usually excluded from this coverage. If a renter damages your property or gets injured while staying, your regular policy won’t cover the loss.

Home-Sharing Considered a Business Activity 

When you rent out your home regularly, it’s generally considered a business activity. Business activities aren’t covered under a standard homeowners policy, meaning any damage or liability incurred during a rental could leave you financially vulnerable. To protect yourself, additional or specialized insurance is often required.

Coverage Options for Home-Sharing:
  • Insurance Riders: Some insurance companies allow you to extend your homeowners policy to cover short-term rentals. This is typically available for one-time events and must be arranged in advance. Keep in mind, coverage may be limited, and only certain items might be protected.
  • Additional Liability Insurance: In certain states, such as Massachusetts, laws may require hosts to carry additional liability insurance for short-term rentals. Be sure to check whether your hosting platform, like Airbnb, offers sufficient coverage, or if you’ll need to purchase your own.
  • Specialty Policies: Several insurers offer specialized policies tailored specifically for home-sharing, covering the unique risks associated with short-term rentals. These policies can provide peace of mind by covering both property damage and liability.
What About Renters? 

If you’re renting a property and plan to sublet it through a home-sharing platform, review your renters insurance policy and consult with your landlord. Renters insurance typically does not cover subletting, and your sublessee will need to secure their own coverage to protect their belongings.

Stay Informed and Protected 

Before listing your property for rent, it’s essential to review your current insurance coverage and explore any additional policies or endorsements you may need. Ensuring you have the right coverage can prevent significant financial and legal issues down the road.

Follow us on social media for more tips and insights on keeping your home protected while maximizing the benefits of home-sharing!

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