Renting out your property on Airbnb is an increasingly popular way to supplement your income. As lucrative as it may be, however, it also introduces specific risks that standard homeowners insurance may not cover. In this article, we’ll explore the ins and outs of short-term rental insurance and hopefully set you on the right path to Airbnb success without the worries.
Homeowners Insurance and Home Sharing
Most standard homeowners insurance policies explicitly exclude coverage for short-term rentals or home-sharing activities. That means if you’re hosting guests through Airbnb, your existing policy may not cover damages or liability that result from these rental activities. Short-term rental operators in Florida, for example, need specific insurance that provides coverage for guests in case of accidents.
Mortgage Lender Requirements
If you have a mortgage, your lender usually requires you to maintain homeowners insurance. This insurance generally covers damages from events like fires and provides liability protection. However, if you’re renting out your property, your standard policy might not be sufficient.
Extending Coverage for Short-Term Rentals
Some home insurance companies provide the option to extend your existing homeowners coverage for a one-time rental by adding an insurance rider or specific endorsement. This can be a convenient solution as it allows you to remain protected during individual rental periods without needing to purchase a separate insurance policy.
However, if you’re regularly renting out your home to generate income, insurers usually classify this as a business activity. In such cases, a standard homeowners policy won’t be enough, and you’ll be required to obtain business or landlord insurance designed to address the risks associated with ongoing rental activities.
Airbnb’s AirCover for Hosts
Airbnb provides its own protection plan called AirCover for Hosts, which includes up to $1 million in liability coverage and up to $3 million in property damage protection. The plan is designed to offer some degree of security for hosts in case of accidents or damage caused by guests.
That said, it’s important to thoroughly review the details of this coverage, as there may be limitations, exclusions, and conditions that could impact your protection. While AirCover is not a replacement for traditional insurance by any means, it can serve as a valuable supplement, offering additional peace of mind for Airbnb hosts.
Subletting as a Renter
If you’re a renter considering subletting your property, you need to get approval from your landlord before you do anything. Unauthorized subletting can lead to lease violations and potential eviction.
While typical renters insurance policies cover property damage, theft, and liability, if you’re subletting, your renters insurance may not apply. You’ll most likely need an additional policy to adequately cover your belongings and any potential liabilities.
Key Considerations for Airbnb Rental Insurance
Because consistent home-sharing or short-term rentals are viewed as a business activity (and often leading to insurance companies dropping coverage), it’s vital to inform your insurer about your rental activities and explore the appropriate coverage options.
Gap Filling
To address potential gaps in coverage, consult with your insurance provider to find out what’s needed for home sharing. This might include a separate policy, a supplemental rider, or enhanced coverage. Whatever it is, you need to make sure the extra money you earn renting out your property doesn’t end up being spent on physical or legal damages you weren’t covered for.
Protect Your Property with Home Insurance Florida
At Home Insurance Florida, we specialize in helping Floridians safeguard their homes with cost-effective insurance solutions. Whether you’re new to Airbnb hosting or a seasoned veteran, our experienced agents will provide personalized advice and find the best insurance quotes tailored to your requirements.
With an in-depth understanding of the insurance landscape, especially when it comes to Airbnb rentals, we can make sure you and your property are fully protected in the most affordable way possible. Contact Home Insurance Florida, and we’ll find you the best home insurance quotes out there.