The Renters Insurance Guide You Need to Read

It’s 2021. A lot of things have changed quite a bit and that includes how we use our home. Gone are the days when we look for hotels as our main source of residence while traveling. Now we have the luxury of staying at “home”, someone else’s home that is, while we’re away. This is when renters insurance comes into play.

But, as a homeowner if you’re renting all or even part of your home, also known as home-sharing, you will want to keep reading to ensure you are protected from any damage to your property while it’s rented out.

When you use a host company like Airbnb, your home is being shared through a home-sharing network. When you do this, you immediately change the use of your home from “residential only” to a “rental income” property. This means a visit to see your insurance agent. It doesn’t matter if you are an occasional renter or you have someone on the books each week, the moment you are sharing and using your residential property for income, you will need to revise your homeowners’ insurance.

But don’t home-sharing networks provide protection? Why do I need it?

Oh, the myth continues. We get it and we understand it. Many people believe just because they are renting out their home or rooms using a legitimate service with a good reputation [like Airbnb and VRBO] that they are protected against damage. The company will cover damages, right? Wrong. Perhaps they do offer you some protection, but we recommend reviewing your plan with your insurance agent to ensure you are covered for the messy side of renting property, like if you get sued. And, from our point of view, it’s just not worth the risk.

Ok, I get I need more coverage, but what kind of coverage?

Well, we’re so glad you asked. Your homeowners insurance will not cover these claims unless you specifically ask to include them in your policy. Coverage like:

  • Liability and personal accident risks: If one of your guests injures themselves on your property, they may hold you personally responsible. Your homeowner’s policy covers you for the damage you make to the proprietary, but not those renters.
  • Personal property damage risks: This covers you if your guests cause damage to the property. Big or small, the risk is there, and you should be protected from it.
  • Lost income risks: Your home is damaged and you are unable to rent it out. This results in “lost income” because you are not able to rent it out until the damage is repaired.
  • Criminal activity risks: No one wants to go here, but guests have been known to conduct unlawful activities and deaths have even occurred during some rowdy parties that were not authorized by the homeowner. We suggest you protect yourself from this.

So, do I need two policies or can I keep just one?

Great question and our answer is it depends. Depending on your situation, IBC may agree to keep your home insurance policy as is, with exclusions for any liability or damages arising from the home-sharing activity—on the condition you obtain specific insurance for home-sharing activity through a specialized program or commercial policy.

If you are renting your home for additional income, call your agent today to ensure you are covered in the event of loss or damage. If you have any questions or are ready to review your plan to make sure you’re covered, give us a call at 712-277-2424 or fill out this form online.

At IBC, we’re more than insurance. We’re here to help you protect the things that matter most.