Sharing is good, but it can be risky
Innkeeper businesses have been in operation since the beginning of time, but you don’t have to run a business to share your home with someone. It’s not uncommon for people from different parts of the country or world to trade homes with one another for their vacations. For example, Saratoga Springs, N.Y., is home to the Saratoga Race Course, where the horse-racing season runs eight weeks in late summer. Many homeowners rent their homes to racing fans during this season while they go to Cape Cod on vacation. Cape Cod or Saratoga Springs: How can you lose?
Home-sharing network companies (e.g., Airbnb and HomeAway) take the traditional bed-and-breakfast concept to a new level of opportunity for casual hosts. Accommodations can range from the host simply offering a bed to a guest for the night, to renting an entire house for a week. While the standard homeowners policy could provide limited coverage (maybe), you typically will want broader protection than a homeowners policy, depending on the financial risk involved.
When new exposures are created by social behavior and invention, as in the case of home sharing, there eventually will be a reaction from the insurance industry. Insurance companies make the case that these exposures were not contemplated when rates were established for the homeowners policy, so coverage must be carved out and reintroduced by endorsement for additional premium. Some companies may even avoid providing policies to homeowners who host guests through home-sharing network companies, due to the extraordinary exposures involved with this activity. It may take time for these insurers to get comfortable with insuring this hobby-style of risk, in which the customary business acumen may be lacking.
Companies now use standard endorsements that will remove most coverage in the homeowners policy for home-sharing host activities. So, you are sharing your home in this manner, we urge you to contact our office to make sure you have all the necessary insurance coverages in place to protect you before you need them. We also can help you determine what coverage, if any, is being provided by the home-sharing network company you are using.