Rent-by-owner home sharing is an
exciting new concept that has created a fast and convenient way to save money
on lodging. At a glance, it seems like an enticing win-win exchange, but lately
people have been discovering that the convenience may come at a cost. While, in
most cases, their client's experiences end up being uneventful, an increasing amount
of problematic cases have inspired insurance companies to remind their
customers of the inherent risks and responsibilities involved with a 'shared
economy' room rental service, as well as any other way you may meet strangers
for rent.
Although this is a case by case issue,
most homeowner's insurance agreements do not provide coverage for business use.
First and foremost, it is important to check in with the terms of your specific
policy. In fact, it is reported that nearly 3 out of 4 rent-by-owner users are
not legally permitted to use this service, however most of these are in large
cities which have specific laws regulating such activity, for the purpose of
protecting its citizens from heightened rent cost. We should also mention that
lying to your insurers or withholding the fact that you are using this site
will often impact your coverage and even put your existing coverage at risk.
Some of these companies offer a coverage
plan for no cost to the host, however this coverage is what is called
'secondary coverage' and requires its users to go through their personal
homeowner's insurance policy before they are willing to step in. In fact, because
of services like these, the city of San Francisco has created a new law
requiring people to hold at least a $500,000 liability coverage plan before
they are allowed to host. Risks like injury, theft and property damages are
more often than not unaddressed by the organization, and if you are considering
putting up your own property for rent, one must first confirm with their
personal insurance policies that they are covered for anything that may
occur.
If you still wish to get involved in a
program like this there are steps you can take to lower your risk. Simple
things like relocating valuables are a great place to start, however more
important steps may require more substantial efforts. For example, it is
important to make sure your home or apartment adhere to your state's safety
standards, which some companies do not require to be verified. These may
include proper safety exits, sprinkler systems, or smoke detectors. There have
even been cases where people who have stayed in a rent-by owner home and have
been exposed to carbon monoxide poisoning. If such an oversight were to occur,
the burden of liability will fall first on the homeowner, supporting the
argument that it may not be worth the risk if such provisions are neglected.
Despite these risks, home sharing can be a lucrative and fun endeavor, so long
as you cover your bases and speak with a representative from your homeowner’s
insurance provider. Just be sure to always be mindful of your liability, and
the amount of risk your current financial situation affords you.
