Peer-to Peer Home Rental

Peer-to Peer Home Rental

The Sharing Economy and Homeowners Insurance

If you are considering renting out your home, your guest room or even your couch your first step should be to contact your insurance professional. Peer-to-peer home sharing opportunities such as Airbnb can be a great way to bring in extra money and are increasingly popular; however, they can also leave you financially vulnerable. If your renter starts a fire and damages your property or is hurt while renting your home, will you be protected?


Before embarking on a peer-to-peer financial arrangement, call your insurance professional and get their advice. In general, if you are only planning to rent your home out for a single occasion, many insurance companies will extend your coverage to the renter. The one caveat is that the insurer must be notified ahead of time.


It is not unusual for someone to rent out their home (or part of it) for a major event when there may not be enough hotel space available in the area. Many insurance companies take this situation into account when creating a homeowners or renters policy; other insurance companies may require the purchase of an endorsement to the policy to provide broader coverage for the renters in your home.


If you plan to rent out all or part of your home on a regular basis, many companies will consider this a business use. Standard homeowners and renters insurance policies are designed for personal risks, not commercial risks. In this case you will need to purchase a business policy—specifically either a hotel or a bed and breakfast policy. Some companies now offer a home-sharing liability insurance policy that can be purchased on a month-to-month basis, but there may be exclusions and limitations, so read the policy carefully.


If you are using a peer-to-peer network to rent a space from someone else, check your own homeowners or renters insurance policy. In most cases, if your personal possessions are stolen or damaged off-premises, you can simply file a claim with your own insurer. And if you accidentally injure someone, you will also be financially protected.