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How Home Sharing Affects Homeowners Insurance

Even the most comprehensive homeowners policy may not cover any insurance claims that result from home sharing. Before you list your home for rent, it is important to go over your homeowners insurance coverage to protect your belongings against damages and protect yourself against personal liability claims.

The five basic areas of coverage offered by homeowners insurance are:

  1. Building and other structures
  2. Additional living expenses
  3. Personal property
  4. Liability
  5. Medical payments

Home sharing is a new type of business that has been growing in popularity for the last few years. Interested guests find a listing and pay the renting fee directly from their phones. Unlike hotels, the rented property is not licensed or regulated. According to Pew Research, 11 percent of property owners in the US have used home sharing network like Airbnb, VRBO or HomeAway for overnight stays in private residences.  

According to the Insurance Information Institute, some insurance companies will extend your homeowners coverage for a short-term rental. Homeowners need to make the company aware of ahead of time. Other companies require property owners to purchase a specific endorsement which is added on to an existing policy.

If you plan to rent your home out multiple times with home sharing services like Airbnb, you may need to purchase landlord insurance or business insurance to have coverage for the rental property. When a property owner rents out rooms, the home becomes a business.

Insurance Coverage provided by home sharing service AirBnb

The popular home sharing service Airbnb offers Host Protection Insurance to protect homeowners. The program provides primary liability coverage for homeowners for up to $1,000,000 per occurrence for bodily injuries and property damage sustained during an Airbnb stay.

The coverage provided by the home sharing service is limited to a $1,000,000 per listing location and under certain conditions, limitations, and exclusions may apply. The Host Protection Insurance program is not offered in every country the service is in.

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