Home-sharing, or peer-to-peer renting, has soared in popularity thanks to sites like Airbnb, HomeAway and Roomorama that give renters the opportunity to room with a host in a privately-owned property, paying similarly to a hotel stay. The property is not a licensed hospitality provider, so insurance concerns are common for hosts.
According to the National Association of Insurance Commissioners (NAIC), standard homeowners and renters insurance policies generally do not cover home-sharing-related claims. Hosts must consider what their course of action will be if a guest is injured on or vandalizes the property. If you rent your home frequently, your insurer may deny coverage because your policy does not cover home-based businesses. If you rent your home only occasionally, your insurer may be able to provide an endorsement to protect you, but it is not guaranteed.
Because these and other factors must be considered, it’s important to discuss home-sharing with your insurer prior to renting. The NAIC recommends purchasing a landlord policy for liability protection and to cover possessions, any legal fees and lost rental income due to damage. You might also require renters to provide proof of their own homeowners, renters, or personal liability insurance for added protection.
At present, Airbnb offers host insurance coverage up to $1 million if a guest is injured on or damages the property.