Renting out homes or rooms is not something new. Since the dawn of dwellings, humans have been offering temporary shelter to others and charging a fee for it. In today’s world the ability to find a place to stay on vacation is incredibly easy thanks to new technologies like HomeAway or Airbnb.
Renting out a room, home, condominium, or apartment does bring on a host of exposures to individuals that they normally would not see. Here‘s a brief summary of some new liabilities one can expect.
- Renters and their guests falling down on your property and being injured.
- Your personal property being stolen or damaged by renters or their guest.
- Responding to renter’s negative comments or reviews on social media platforms.
- Protecting your property from being damaged by unruly renters or their guest.
- Entering your unit unannounced while it’s being rented.
Personal homeowner’s policies can provide coverage for some of the matters mentioned above when the rental is considered occasional. Unfortunately, a homeowner’s policy does not say what occasional means. I have heard different “opinions” about what occasional means. The common refrain is this. If you rent out your home once a year for no more than a week, you’re going to have some coverage. Anything beyond that is really up to the insurance carrier’s interpretation.
If you are looking to use services like HomeAway or Airbnb, call your insurance carrier or agent first. The good news is some insurance companies are starting to respond with coverage options.
Questions to ask your insurance professional
Here’s a list of questions you should ask your insurance professional. Will my policy protect me for the following:
- Someone is hurt on my property while they are renting from me
- My property is damaged by renters or their guest
- I respond to their negative comments about me and my home on Social Media.
- I have to kick out a renter because he had have become unruly.
- I had to get physical with a renter who was trying to destroy my property.
These questions are important because they address various coverages that could be purchased under a homeowner’s policy or in the general insurance marketplace.
Question 1 deals with bodily injury coverage. Every homeowner’s policy has some form of coverage for bodily injury. In a rental situation this is a common claim that we see.
Question 2 deals with contents coverage under a homeowner’s policy. When it comes to renters, let’s face it, they take care of their own stuff not yours. Damage to your personal property can and will happen from a damaged Flat Screen TV to broken furniture. Like the time I rented a home in Ocean City, NJ, and the previous tenant had cracked the glass top to a dining room table. To “fix it” they used duct tape.
Question 3 and 4 deal with personal injury matters. Personal Injury deals with matters of the mind whereas bodily injury deals with injury to the body.
Slander or disparagement comes into play if you respond negatively to someone who criticizes your home or you personally on social media. It’s not uncommon in this day and age for people to feel less restrictive to share their thoughts on social media. This is in spite of the fact that their name is being tagged right next to the comments that they make.
Kicking out a renter could be construed as wrongful eviction which you could be sued for.
Question 5 deals with the matter of using reasonable force to protect personal property. If one uses reasonable force to protect personal property, a homeowner’s policy should respond under liability coverage. The challenge here is knowing what kind of force is considered reasonable. That becomes a legal matter to which this author and this blog could not define.
If you are deciding to go forward with renting your home, room, or apartment, check first with your insurance agent or company and find out what you can do to get your homeowner policy to offer the coverages you need.
I’ll talk more in another blog post about Airbnb and the insurance coverages they will provide for you if you rent through them.