Consumers Engaged in Home-Sharing Encouraged to Have Proper Property and Casualty Insurance Coverage

Coverage should protect liabilities associated with the home-sharing transaction

The Maryland Insurance Administration is encouraging consumers engaged in home-sharing to have proper property and casualty insurance coverage and to be aware of what’s required in this situation.

According to the Pew Research Center, one in ten Americans has used a home-sharing site to stay in someone’s home for a period of time. A few tips for individuals engaged in renting out rooms for profit include:

Purchase the right coverage. Regularly renting out rooms for a profit may be considered a home-based business. In some cases, homeowners policies may not cover damage to your home or the items in your home caused by a paying guest, or protect against liability if a guest suffers an injury. You should talk to the home-sharing service and your own insurance agent to determine if additional liability coverage or special landlord insurance is needed. Some home-sharing companies offer host protection guarantees to cover disputes between owners and renters.
A new type of coverage available in the surplus lines market, called “home-share business multi-peril insurance,” is specifically designed to provide protection for homeowners utilizing home-sharing apps such as Airbnb or Vacation Rental by Owner (VRBO). This insurance is issued by a non-admitted insurer not under the jurisdiction of the Maryland Insurance Commissioner. Home-share business multi-peril policies will protect a homeowner in the event of property damage or theft, as well as providing coverage for some forms of liability that may arise from the home-sharing transaction. These policies are designed to cover the combination of risks that homeowners are likely to face in the home-share market.
Ask for proof. Consider only renting to guests who show proof of homeowners, renters or personal liability insurance. If a guest damages rented property, hosts can report a claim on the guest's policy.
Review your personal policies. Consumers staying in accommodations secured through a service, such as Airbnb or VRBO, should confirm their homeowners, renters or personal liability insurance policies offer protection for potential damages to the rental property. If not, make adjustments as needed.
Check the terms of use. Home-sharing user agreements change often. Read the fine print every time.

For more insurance tips about the sharing economy, visit the Insure U online Sharing Economy page at: http://www.insureuonline.org/insureu_special_sharing_economy.htm.