Last year, Airbnb doubled its number of guests across Wisconsin. That number doesn’t include growth in VRBO and other services. But before you join the bandwagon, you need to understand the risks you face. Continue reading to learn more about how to protect yourself.
What Could Go Wrong If You Rent out Your Home
Whether you’re renting out your primary residence, a vacation home, or just a room, there’s a lot that can go wrong during the rental. You face the usual hazards, such as storm damage and fires, only visitors likely won’t be as careful as you would. That means a potentially greater risk of damage from things like a burning candle, an open window during rain, or frozen pipes during the winter.
Also, you face the risk of damage caused by your guests. This could come in the form of theft, intentional or unintentional damage to your home, or damage they cause to your neighbors’ property.
Finally, should one of your guests get injured while staying in your home, there’s a good chance you could end up facing a personal injury lawsuit no matter what caused their injury.
Other Things You Need to Consider
In addition to the liability risks, there are other pitfalls you need to be prepared for.
- Will guests coming in and out of your home become a nuisance to your neighbors, and how will they respond?
- Does your condo or homeowner’s association have any applicable rules that could lead to fines?
- How will you handle messes and damage that are too big for your deposit but too small to be worth an insurance claim?
- What will you do about family heirlooms and possessions with sentimental value that can’t be replaced?
Is Your Existing Insurance Enough?
If you’re sure renting your home is right for you and that you believe insurance can cover your risks, you need to make sure you have the right coverage. Your homeowner’s insurance policy may only cover your own personal use of your home and not rental activities.
That means that there’s a chance that if your home burns down while it’s rented out, you may not have insurance coverage. Of course, your coverage depends on your exact insurance contract, and there are a few questions you should ask.
- Do you have coverage for rental activities?
- Is there a limit on the number of nights per year?
- Do you have to be home, i.e., is there a difference between renting a room and renting your entire home?
- Is there coverage for all of the perils discussed above?
- Is there coverage for legal fees, fines, or related costs if you or your guests run afoul of the law?
Remember that while Airbnb and other providers offer included insurance coverage, there may still be coverage gaps or exclusions. You also run the risk of them claiming that you violated their contract and saying their insurance doesn’t apply.
To learn more about the insurance coverage that you need when renting out your home and what’s covered by your existing policies, contact GOEBEL Insurance.