Ah, the lure of easy money. You’re planning on taking a week away here and there throughout the year. You keep hearing about rental services like Airbnb and think it’s a great alternative to traditional hotels. Then someone suggests renting out your own home while you are away. Why not, you think. They have a good vetting policy, renters are screened and most rental stories you here are good ones. Plus, maybe you can break even on your lodging costs if someone is also paying you. But before you sign-up, pull out your homeowners insurance police and do some research.
If you only plan to rent out your home once or twice a year, a standard homeowners policy will probably suffice. Some insurance companies may require a special endorsement. Either way, you should definitely notify your insurance professional about the rental. You may also want to consider mandating a renter’s insurance policy, as property belonging to the tenant would not be covered.
If you plan on renting out your residence several times a year on a regular basis, or have a vacation property for rental, this would constitute a business. Standard homeowners insurance policies do not provide any coverage for business activities conducted in the home. To be properly covered you would need to purchase a business policy—specifically either a hotel or a bed and breakfast policy.
If you are planning to lease your home for a longer period of time, say six months or a year, you will likely need a landlord or rental dwelling policy. f you are regularly renting out a vacation home or investment property, this would also require a landlord or rental dwelling policy. Landlord policies provide property insurance coverage for physical damage to the structure of the home, for any personal property you may leave on-site for maintenance or tenant use, and liability coverage.
Your best resource for all things insurance is your insurance professional. They are well-versed in what coverages are offered in a standard homeowners policy, which are needed for different rental arrangements, and how to best protect you and your home. Make an appointment to discuss all of your coverage options and make sure you have what you need.