Want To Rent Out Your Home To Guests? 4 Things To Know About Home Insurance

29 December 2019 by Elijah Steward

If you want to use one of the many popular sites that allow you to rent out unoccupied bedrooms to short term guests or even rent your entire home out to short-term guests when you are not using your home, you need to make sure you have the proper insurance.

Thing #1: Inform Your Insurance Company

If you are going to rent out your home, even on a very part-time basis, you need to inform your insurance company. Not informing your insurance company that you are essentially running a business out of your home could result in any claim you make being denied because you withheld this information from your insurance company.

Some insurance companies will allow you to have occasional tenants under your homeowner's insurance policy, and other insurance companies will not allow you to have tenants. You need to talk with your insurance company to discover what their position is so you know how to move forward.

Thing #2: Keep Your Homeowner's Insurance

First, you need to keep your homeowner's insurance in place. Your homeowner's insurance is designed to protect someone's personal property, i.e. their home. It was not designed to protect a business property, which you are turning your home into when you rent it out.

However, that doesn't mean you should ditch your homeowner's insurance. Your homeowner's insurance provides you with protect against unexpected perils, and it provides you with money to replace your home and personal belongings if they are damaged in a covered event.

Thing #3: Add Home-Sharing Insurance

The most common type of insurance that your insurance provider will ask you to carry when you let you know that you run short-term rentals out of your home is a home-sharing insurance policy.

A home-sharing policy provides you with all the regular coverage you would get from a homeowner's policy, plus a little extra coverage. You will also get liability coverage that will cover your guests, as well as coverage for their personal belongings. Home-sharing insurance is considered a type of business insurance.

Thing #4: Get Commercial Insurance

If you are not living in the home at all as a resident for yourself and you are using the home solely as a full-time rental, you may be required to get commercial insurance instead of home-sharing insurance or a home-sharing endorsement.

Before you post that spare room you have up on a rental site, you need to check with your insurance company to make sure you have the right level of coverage. You need to have the right insurance coverage before you start renting out your space in order to protect yourself and your guests if something goes wrong.

For more information, contact a homeowner's insurance company in your area.

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