Many Americans who own multiple properties rent them out as vacation homes. Short-term rentals to vacationers are great moneymakers. Services such as Airbnb are growing in popularity thanks to their relatively low cost compared to average hotels and ease of access, but it’s crucial for property owners to know their level of liability for any accidents that cause injuries to renters.
If a homeowner slips and falls and suffers an injury in his or her own home, the homeowner can use his or her own medical insurance to cover the damage. However, if a renter suffers an injury in the homeowner’s property and claims it is the fault of the homeowner, the ensuing legal process can be time-consuming and costly. A homeowner in this situation can face attorneys’ fees as well as the final settlement or cash award, but insurance can sometimes come into play and help homeowners in these situations.
Steps for Homeowner Protection When Renting Out Your Florida Vacation Home
People who rent homes to Airbnb customers or other renters should take several steps to protect themselves from liability for any slips, trips, falls, or other accidents to renters. The first step is securing insurance coverage for possible property damages or other losses. The next step is investigating whether a short-term rental service will provide any host protection insurance. Airbnb’s host protection insurance covers up to $1 million per incident, capped at $1 million per listing location. This coverage can extend to damages caused by renters as well.
GRS .B carefully outlines its Host Protection plan and what it covers, which generally extends to property damage renters caused but does not extend to securities.
Airbnb makes it very clear that its Host Protection plan is not an insurance policy and will not cover:
- Stolen valuables
- Cash
- Collectibles
- Artwork
- Pets
- Jewelry
- Other securities. It will not cover personal liability, either.
Some homeowners’ insurance policies will cover damages to guests, but only under certain conditions. Homeowners should read their insurance policies very carefully. Most homeowners’ insurance policies will not cover accidents if the homeowner is operating a business out of the home. However, they generally cover occasional rental-related accidents, such as renting out your home to Airbnb guests once per year for a few days at a time. In these situations, the insurance carrier may require the homeowner to purchase an endorsement, or additional coverage package, for renters, which can cover on average about four weeks per year.
If a standard homeowner’s insurance policy won’t cover short-term rentals and the insurance carrier does not offer additional coverage options, the homeowner will need to secure insurance through different means, such as a landlord’s insurance policy. These policies are generally more expensive than typical homeowners’ insurance policies due to the assumed the higher likelihood of accidents among renters in unfamiliar properties compared to homeowners in their personal homes.
Do I Need Vacation Rental Insurance?
Any renter, whether short-term or long-term, can have additional security in the event of a personal injury with renter’s insurance. Renter’s insurance generally provides coverage for personal property and other damages that occur in a rented property. A landlord’s insurance policy will cover structural damage to the building only and will not cover a renter’s liability or personal property damages. Renter’s insurance will cover a renter if a guest visiting an apartment or other rental property suffers injuries or other damages.
Ultimately, it is unwise for an Airbnb renter to rely solely on the company’s offered Host Protection plan. It is also unwise to assume a homeowner’s insurance policy will cover damages caused by short-term rentals without carefully examining the policy. There are a host of possible alternatives to Airbnb’s provided coverage, and many opportunities for additional insurance coverage for short-term rentals. However, it’s up to rental property owners to assess their degree of liability, how much they are willing to pay in insurance premiums, and how much they stand to earn in rental fees.
