With the rise in popularity of sites like Airbnb and VRBO (Vacation Rentals by Owner), many River Falls, area homeowners are thinking about cashing in on their own homes and renting them out to travelers and vacationers.
It’s definitely true that doing this can be lucrative. But if you are considering it yourself, stop and take a moment to think: Do you really know what consistent home rental entails, especially where insurance is concerned?
We want to help you have all the facts and feel more confident about renting out your home if that’s what you decide to do. Check out these answers to some of our clients’ most frequently asked questions:
FAQ: Home Rental Insurance
1) What insurance do I need to have for a home rental?
This is a big question and one we’d be hard-pressed to answer completely in one article — mostly because it will depend on your specific circumstances and what home insurance you already have. For this reason, always go directly to your insurance agency to discuss your unique situation.
Still, we can help you with some general advice.
What’s most important to remember is that your home insurance policy will not likely cover you if you plan on renting out your home on a regular basis. That’s because insurance agencies know that renting your home to strangers is simply riskier than living in the home yourself.
The added type of insurance you’ll need is up for debate, however. If you are just renting once or twice, you may be able to get a rider for your insurance policy that will cover these time periods. Long term rentals may require business insurance or rental dwelling or landlords insurance.
2) Why can’t I just use the insurance provided by sites like Airbnb?
Insurance provided by Airbnb and other hosting platforms is not comprehensive, and it will leave you with major coverage gaps if you only rely on this type of insurance.
3) What kinds of gaps in coverage are we talking about?
For the most part, hosting platform insurance covers only liability claims and will not take care of damage or theft to your property or building structure. Therefore, if you rented out your home using only the insurance provided by a site like Airbnb, someone could ostensibly steal everything in your home after their stay there, and there would be nothing that your Airbnb insurance policy would do to protect you. On the other hand, if someone slipped in the bathroom in your home and tried to sue you, this could be covered to an extent by your Airbnb insurance.
4) Where can I go if I have more questions?
Whether you have additional questions or not, if you decide to move forward with renting out your home, you should speak with your home insurance company right away. Only a knowledgeable home insurance agent can tell you where your coverage gaps will be and what additional insurance you may need to purchase. Furthermore, if there are risks you may not have anticipated, your insurance agency can spot those and hopefully help you avoid them.
Many people who are interested in renting out their home at first, will eventually decide not to follow through because of the numerous risks involved in this endeavor. This doesn’t mean that this will occur with you, but it’s always a wise idea to know exactly what you’re up against and get all the facts.
At Reis Insurance, we’ll help you do just that. Give us a call or stop on by at your earliest convenience to discuss this venture with one of our qualified insurance agents.