Peer-to Peer Home Rental
The Sharing Economy and Homeowners Insurance
If you are planning to rent out your home, guest room, couch—or even your home office while you are at work—your first step should be to contact your insurance professional. Peer-to-peer sharing opportunities, such as Airbnb, can be a handy way to bring in extra money and are increasingly popular; however, they can also leave you financially vulnerable, for example if your renter damages your property or if someone is hurt while they are in your home.
If you are considering a peer-to-peer financial arrangement, call your insurance professional and get their advice before proceeding. 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 sports event, or even for graduation at a local college, when there may not be enough hotel space available in the area. Many insurance companies take this type of situation into account when creating a homeowners or renters policy; however, other insurance companies may require the purchase of an endorsement to the policy to provide broader coverage for the renters in your home.
In the event that you want to rent out all or part of your home on a regular basis, the situation changes: you are now running a business. Standard home and renters insurance policies are designed for personal risks and not business ones. In this case, you will need to purchase a business policy—specifically either a hotel or a bed and breakfast policy.
If you are using a peer-to-peer network to rent a space from someone else, it’s a good time to check your own homeowners or renters insurance policy. This way, if your personal possessions are stolen or damaged off-premises you can simply file a claim with your own home insurance company. And, if you accidentally injure someone you would also be financially protected.