What Type of Insurance Do I Need If I'm Renting Out My Home?
There are many reasons why you might want to rent out your home on either a short- or long-term basis. Whether you own a second home that you plan to lease to a tenant, or want to rent out a room in your house periodically though an online service such as the increasingly popular Airbnb, your first step should be to call your insurance agent or company representative. Depending on the rental scenario, your standard homeowners policy may not cover losses incurred while your home is rented out, and you may require a more specialized insurance policy.
Short-Term Rentals/Primary Residence
- Some insurance companies may allow a homeowners policyholder (assuming they have notified the company) a short-term rental. Other companies will require an endorsement to the existing homeowners or renters insurance policy in order to provide insurance coverage.
- If you plan to rent out your primary residence for short periods, but on a regular basis, to various ‘guests’, 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.
Long-Term Rentals/Second Home
As the landlord, your coverage is only on the structure itself and your financial interest in it. Your tenant’s personal possessions are not covered under your policy. In order to avoid disputes in the event of damage to the renter’s belongings, many landlords require a tenant to buy renters insurance before signing a lease.