What to Know About Airbnb Renters Insurance
Property owners are signing up for Airbnb to make extra income from a home area they don’t use. On the other hand, the easy process to sign up, and book online based on pictures and good reviews, distract homeowners from the fact that financial and legal consequences can happen from neglecting a short-term insurance coverage.
Most domestic insurers providers consider a short-term rental on Airbnb, no different than a hotel. Moreover, as a “business activity” some insurance will limit the coverage as a home-sharing endorsement worth approximately $10,000 per claim.
Short-Term Rental Insurance
If you’re renting out your home on any property rental site, you must obtain adequate coverage before listing it up for rent. Many states are regulating rentals, and property owners are legally required to maintain business liability insurance. At FIC Insurance we can find the vacation rental insurance that fits your needs protecting your property from damage or liability issues.
Be Careful of “Free” Airbnb Insurance Providers
The Host Protection Insurance and the Host Guarantee clause may sound that you are protected. It gives property owners the confidence to go ahead and rent their place in a short-term agreement without extra insurance. However, risks include property damage and liability which entails being legally responsible for all the guests staying in your property. In fact, for the law, you’re not much different than a hotel business, making you liable for their medical bills related to their injury.
Unfortunately, the terms of the first coverage reimburse only for minor issues. For example, exclusions such as liability coverage in the case of assault and violence can add up into the thousands of dollars. The Host Guarantee is not an insurance plan and does not cover liability. It only covers a small part of the property with many exclusions possibly leaving you with a hefty bill.
Your Homeowners Insurance Does Not Cover a short-term Guest
Your insurer could terminate your coverage if they find out you are having these type of contracts. They may refuse to reimburse you the money for any claims filed by a standard homeowners policy. On the other hand, for a Total Loss Coverage, the Actual Cash Value system is a method that calculates the cost of rebuilding your property based on the depreciation. The downside is the older the home, the less likely to get enough money to rebuild it. On the other hand, the method of reimbursement takes into consideration the amount required in today’s market to rebuild the property.
FIC Insurance Agency will help their clients find the best Airbnb Renters Insurance coverage! For further assistance please call 800-582-4342