My House, My Rules Takes on a New Mantle

Learn that short-term rental of a homeowner’s residence involves more than making money.

Home & Car 1

Read a few scenarios that are not covered by the typical homeowner’s insurance policy.

The neighbors are doing it. Your friend is doing it. It’s so popular, even Grandma down on the old farm is doing it. Doing what? They are all making extra income by renting out their personal residence or a room of it to vacationers. Short-term rental of private homes is a growing trend all over the country, including in Ohio. Is this activity for you?  

Beyond the basic considerations of whether or not you are willing to hand over your house key to strangers, there are legal and insurance issues to address. While you may or may not be a stickler for “my house, my rules”, you will have to be mindful of state and local regulations and laws applicable to short-term rental of privately owned and occupied residences. Is registration or permitting required? What about safety inspections? Are you willing and capable of keeping abreast of both existing and evolving laws, and complying with them?  

Whether you utilize a trademarked platform that offers short-term homestays, or you operate independently of a trademark platform, there is, of course, the issue of insurance. If you’ve got homeowner’s insurance, you’re covered, right? MAYBE. The truth is this activity is revolutionary from the perspective of “Who’d have thought?”. Until recently, no one seriously imagined that privately owned and occupied homes would be rented out to strangers for short-term homestays. More to the point, the homeowner’s insurance market is now exposed to tremendously more potential losses than these insurance companies previously evaluated and baked into their rating structure. The fact is the typical homeowner’s insurance policy was not designed to respond to potential risk exposures posed by short-term homestay rentals. Without question, changes will be forthcoming in the homeowner’s insurance market, as a result of the widespread use of privately owned and occupied homes for short-term rental. Exactly what those changes will be are not known at this time. 

Even the broad coverage afforded in today’s typical homeowner’s insurance policy will not cover certain losses arising out of the short-term rental of a privately owned and occupied home (or part thereof). While actual policy terms, limits, and conditions always apply, visualize a few scenarios which your standard homeowner’s insurance policy would not cover: 

  • There is no theft coverage for your personal property stolen by a renter. Imagine a renter who departs with your home’s big screen television set or expensive exercise equipment.  
  • A renter is cooking, and a grease fire occurs, causing extensive damage to your house. There is no coverage for loss of rental income due to the need to cancel future reservations.  
  • A renter trips on a rug, falls, and sprains a leg. He/she goes to a non-emergency medical center to be checked by a doctor and presents you with the bill. There is no Medical Payments Coverage for minor injuries to the renter. 

A homeowner who rents out his/her home or any part thereof for the short-term, including a room above the garage, needs proper insurance coverage. Whether your homeowner’s insurance company offers an endorsement for short-term homestays at an additional premium or you need a separate insurance policy, your independent insurance agent is the right call to make. 

Your Trusted Choice Independent Insurance Agent at Richey-Barrett Insurance represents several insurance companies. Contact us today to discuss the specific type of short-term, homestay rental you are considering, and we will be happy to suggest insurance coverage that meets your needs.    

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