Airbnb Means Risky Business in the Insurance Realm
Airbnb is all the rage now; it’s a website that offers an easy, online means for homeowners to rent their houses—or rooms within it. While it might seem like a great way to earn additional income, running any kind of B&B raises a red flag for your home insurance company, and so we want to raise that flag for you.
Most companies that offer homeowner’s insurance shy away from Airbnb and other B&B situations and are likely to non-renew your policy if your home is being used in this way. There is an increase in risk when you rent to strangers from both a liability and a property standpoint. The homeowner’s policy does not allow for this higher risk.
When you rent all or part of your house through Airbnb, you are also essentially turning your home into a business. A homeowner’s policy is not designed to cover a business, so you are taking on risk that your claims—in the event of fire, theft or a slip-and-fall incident—might not be covered losses. If you rent a detached structure, and it burns down, for instance, your insurance company will not pay on your claim because buildings used as a business are excluded from coverage under a homeowner’s policy.
Over time, the insurance industry will catch up with this new home-sharing economy and custom products will be developed to insure Airbnbs. Right now, though, we recommend that you call our office for help if you are contemplating providing this service in your home. We can adjust your coverage, talk to you about Airbnb’s $1 million liability policy offering or help you find an insurance company that is willing to write your homeowner’s policy.