Home sharing and your homeowners policy

Home sharing and your homeowners policy

| October 13, 2021

What is home sharing?

There are many types of innkeeper businesses that have been in operation since the beginning of time. Peer-to-peer network agencies, such as Airbnb and HomeAway, have taken the traditional bed-and-breakfast concept to a new level of opportunity by connecting online registered hosts with registered guests. Accommodations can range from the host simply offering a guest a bed for the night to renting the entire house for a week or so.

How does this activity affect my homeowners insurance?

Because this activity represents a for-profit business, it deviates from the personal risks contemplated by the premium charged for a homeowners policy. Consequently, your policy will limit or exclude coverage for much of these lodging accommodations. Eventually, it is expected that many insurers will completely exclude home-sharing coverage in their standard policies and offer optional buy-back coverage.

Do the home-sharing agencies provide any coverage for me?

Many do provide coverage. For example, Airbnb provides $1 million property coverage and $1 million liability coverage for the host. This protection is primary coverage. Of course, you will want to examine the exclusions and limitations applicable to this coverage.

Is there any way to obtain my own coverage for home sharing?

Yes. Depending on the extent of your operations, you may only need an endorsement to your homeowners policy. 

On the other hand, you may need commercial insurance to cover all of your exposures to loss, including workers’ compensation insurance for part-time or full-time employees.

As you can see, the answer to the coverage question is complicated. Property and liability coverage is dependent on the type of property, location of that property and the circumstances of the renter’s occupancy.

In our experience, some homeowners companies will offer to endorse a policy and others will not. Before you host paying guests in your home or consider a VRBO or Airbnb type arrangement, call us so we can advise you about insurance coverage and determine what changes are needed to your policy, if any. We welcome the opportunity to assist with all your home-sharing insurance needs! 

Source: Professional Insurance Agent resource QS90948