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Is homesharing coverage worth it?
Piece together all the add-ons you can to protect your homeshare business.
Homeowners looking to take part in the homeshare market with sites like Airbnb and Vrbo might be surprised to learn that homeowners insurance won’t cover any damages or thefts that happen while your house is rented.
To make things harder, most insurance carriers don’t offer homeshare endorsements — and those that do provide inadequate protection. Before you list your house, it’s important to know what kind of coverage you need to protect your investment.
What is homesharing coverage?
Homeshare services and insurance carriers offer add-on coverage to provide personal property and liability protections to you while your home is rented. As the owner, you not only worry about theft or damage caused by renters, but personal liability concerns if renters get hurt on your property.
Homeshare coverage bridges the gap since most standard homeowners policies include exclusions specific to renting.
How does homesharing coverage work?
- Personal property. If your personal belongings are damaged or stolen while your home is being rented, you’ll want coverage to replace or repair the items.
- Damage to the home. If a fire, flood or other event causes damage to your house you’ll need coverage for the repairs.
- Personal liability. Get protection from third-party claims of bodily injury or property damage while renting out your home.
- Loss of income. If the damage to your home causes you to cancel bookings or keeps you from taking new ones, you’ll want coverage to replace lost income.
- Renters insurance. Some homeshare owners require tenants to carry their own homeowners or renters insurance to cover their belongings, but that limits the number of clients and bookings.
Compare home insurance policies with homesharing coverage
Do I need homesharing insurance?
Depending on the homeshare you list your house with, you may already have some form of coverage. But if your service doesn’t offer insurance, or if the insurance offered isn’t enough, you may want to shop around to be sure you’re fully protected.
Listing with Airbnb automatically comes with two forms of insurance:
- Personal property and dwelling. Host guarantee provides up to $1 million in coverage to protect your belongings and home. But it includes exclusions, and you have to prove that you tried to get compensation from the renters before you make a claim.
- Personal liability. Host protection provides up to $1 million in personal liability protection that covers any injury to your renter while on your property or damages to their belongings.
Listing with Vrbo includes up to $1 million in personal liability coverage if you don’t have that coverage through your homeowners policy. If you do, the Vrbo insurance adds $1 million more to your current coverage.
Globe is a startup company whose platform lets you offer their homes for hourly rentals. It’s ideal for people who want to take a break from roommates, escape a noisy apartment or find a quiet space for remote work and virtual meetings.
As a home-sharer, this site could benefit you if you don’t use your home during the day and want to put your space to work. Day rentals could also work well if you don’t mind sharing a small area of your home with others.
In terms of home insurance for homeowners, Globe covers you with:
- $1 million in general liability insurance
- $1 million in accidental property insurance
What’s excluded with homesharing coverage?
The following are the most common gaps in coverage for homeshare owners even with a homesharing add-on:
- Loss of income. This is only covered if you have the more expensive landlord or on-demand insurance coverage.
- Damage caused by pets. Many of the policies exclude any pet-related damage while you’re renting out your property.
- Fine art and other high-end valuables. Almost all of your coverage options exclude high-end personal property, cash and securities.
- Acts of nature. Many of the coverage options only cover damage done by renters, so weather-related damages aren’t covered.
What are my alternatives to homesharing coverage?
If you can’t find a reasonably priced home insurance policy with homeshare coverage, you still have options.
Short-term rental coverage
Some smaller companies offer short-term rental insurance which comes in two ways:
- On-demand insurance. You can pay a per-day fee so you’re covered only the days you have renters.
- A commercial policy. Your home is covered as a short-term rental business.
These are usually the most comprehensive of the policies you can get. But they can be expensive, especially if you’re paying on-demand for constant bookings. Also, coverage may be limited to certain homeshare services and isn’t available in every state.
In some cases, you can purchase a landlord insurance policy. But not only are these policies more expensive than home insurance, some also exclude short-term rentals of less than 30 days.
With the homeshare market rising in popularity, and more risk data becoming available, national insurance companies may start offering homeshare policies. But in the meantime, owners are left to piece together coverage and balance the protections they need with the expense of the policy.
If you’re thinking of listing your property be sure to carefully compare your homeowners insurance options so you can get the best deal and the exact coverage you need.
Frequently asked questions about homesharing coverage
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