Do Your Homework Before Using Home-Share Rental Services

Dover, DE–Delawareans are increasingly planning their summer vacations through online rental services like Airbnb. The peer-to-peer rental marketplace has grown substantially in recent years as travelers seek alternatives to traditional rental market options, and owners rent out their homes, or sometimes just a room within their home, looking to earn some extra income.

“For years, state residents and vacationers from the USA and around the world have enjoyed spending part of their summer at homes in Delaware’s beautiful resort towns,” says Delaware Insurance Commissioner Karen Weldin Stewart. “However, it’s important to make sure you have the proper insurance coverage before you list your home for rent. And if you cause any damage as a traveler renting someone else’s house, you should be aware of the effect that may have on your existing homeowners policy.” Consequently, Commissioner Stewart wants Delaware consumers to be aware of the following information provided by the National Association of Insurance Commissioners:

Thanks to the internet, property owners can now rent a room, or their whole home, directly to a stranger who found their listing through an app or a website. Home-sharing, or peer-to-peer rentals (P2P), are sites like Airbnb, Roomorama and HomeAway that connect hosts with guests. Guests find a property and pay for the stay like a hotel. The difference is that the property is not a licensed hotel or bed and breakfast and is often a privately-owned apartment, condo or house. Anyone can register as a host or guest.

What’s the risk?

What if your guest vandalizes your property, the hallway of your condo or even your neighbor’s swing set? What if your guest gets injured on your property? Both guests and hosts could incur costs if things go astray. As a host, your homeowners or renter’s insurance policies are not designed to cover accidents arising from property rental and your insurance company may deny coverage for any resulting claims.

While operating as an online platform, these types of rentals may fall outside of local zoning or housing laws and regulations, which could result in violating local law or code. Even if you have not violated any law, you might have to hire legal counsel to protect and defend yourself.

How can you protect yourself as a host?

Most homeowners policies provide coverage if a home visitor falls and is injured. However, that is likely not the case if a paying guest falls in your home, because coverage may not be intended for commercial use. And without liability insurance protection from the company facilitating the host agreement, your homeowners or renter’s insurance policy might leave you with no coverage.

Homeowners policies vary, but usually exclude or provide very limited coverage for homeowners who are running a business in their home. Once you begin earning income from renting out your home or a room, you are probably considered a home-based business. If you lease out a room or your entire home for profit, your insurer could claim you’re essentially running a hotel or bed and breakfast and deny coverage. However, if you seldom rent out your home, your insurer might provide coverage. A renter’s insurance policy is subject to the same limitations as a homeowners insurance policy.

To make sure you are protected, talk to your agent about your situation and participation in this activity. If you only occasionally rent a room or your house, your current homeowners insurer might be willing to provide an endorsement to protect you. However, if you plan to rent your house for a long term or if you plan to frequently rent out a room or the whole house, then purchasing a landlord policy (also known as landlord property insurance or rental coverage for landlords) might be your best option. A landlord insurance policy will cover your home, structures on the property, property contents that you own (such as appliances and furniture), lost rental income due to building damage, legal fees and liability protection.

Some experts recommend only renting to guests who have homeowners, renter’s or personal liability insurance and are able to show proof they are insured. Then if your property is damaged, you could file a claim under the guest’s policy.

How can you protect yourself as a guest?  

Your own homeowners, renter’s or personal liability insurance policy will generally protect you even as a guest if you happen to cause damage to a host’s property. But understand that per Airbnb’s user agreement, the company reserves the right to make a claim under your homeowners or renter’s policy for any damage or loss you cause to an accommodation. Other P2P companies may have similar agreements so make sure to check their terms of use.

What else do I need to know?

Currently, Airbnb provides host protection insurance with coverage up to $1 million if a third-party claims bodily injury or property damage against you as a host. This liability insurance program is automatically applied to every listing in the U.S. and the coverage is secondary. It only applies after your primary insurance policy either settles or denies a claim. Laws regarding P2P companies vary from state to state, even city to city so it’s important to speak with someone who is knowledgeable about your location. Since home-sharing companies are still a fairly new phenomenon, talk with your agent or insurance provider about your risks as a host to make sure you are properly covered before you list your property for rent.

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Delaware Department of Insurance: “Protecting Delawareans through regulation
and education while providing oversight of the insurance industry to best serve the public.”

www.delawareinsurance.gov | 302.674.7300

DOVER, DE – The Holidays are quickly approaching and most people have already begun shopping, decorating or planning a trip to see family or friends over the coming weeks. Take some time today to review your insurance coverage and to ensure that you, your family, and your home are prepared for the colder weather and other perils that occur more frequently during this time of the year.

 

Holiday gatherings for most people include indulging in great food and drinks. With all of that extra cooking and baking going on there’s just more potential for a fire. According to the Insurance Information Institute, the average home fire claim costs $34,306. A claim after a fire would likely be lower for renters, since they are only insuring the contents of their rented home or apartment, but many renters do not realize that their belongings are likely not covered by their landlord’s insurance.

 

While the kitchen remains the number one place where fires start in the home, holiday decorations and space heaters greatly increase the chances for fires if you aren’t careful. Never leave candles or space heaters unattended and keep them away from flammable objects. If you have a live Christmas tree, be sure to water it often. Get rid of old strings of lights that get hot and could cause a fire. According to statistics from Allstate Insurance, the median cost for a home fire caused by a Christmas tree is more than $100,000! Christmas trees burn hot and fast, so a tiny spark can become a huge fire in mere minutes. When plugging in lights and decorations outside, do not overload outlets or use substandard extension cords.

 

Allstate Insurance found that theft claims went up by 7 percent during the holidays, which makes sense since our houses and cars are often filled with expensive gifts. When shopping, keep gifts in your car out of sight and, when possible, schedule package deliveries for times when you will be home. Some people send deliveries to their workplace so they can sign for, and accept, deliveries during the work day.

 

Be sure to notify your insurance company if you buy high-value items, like jewelry, art or electronics. There are usually limits on how much the policy will pay for specific categories of items. If an item is worth a lot of money you should ask your agent about scheduling an endorsement (also referred to as a “rider”) to better protect your investment should an item be stolen or damaged in a fire, etc.

 

In today’s world of Twitter, Facebook and Instagram, remember that it’s not always a good idea to overshare the details of when your family will be away visiting Grandma. Don’t make it easy on thieves to come steal presents bought with your hard-earned money.

 

If you’re hosting a party, remember to serve alcohol responsibly and do not let intoxicated friends or family drive home. When the weather brings snow and ice be sure to clear sidewalks and put down salt or de-icer, if necessary. Homeowners and renters insurance policies both provide liability coverage if someone is injured on your property, but know the limits of your policy.

 

Don’t forget that it’s also open enrollment time for health insurance plans on the Health Insurance Marketplace (Healthcare.gov). All plans purchased through the Marketplace will expire on December 31, 2014, no matter when your coverage began in 2014. If you would like to re-enroll, change plans or sign up for health insurance for the first time you can do so until February 15, 2015. However, anyone who wants a plan to be effective starting on January 1, 2015, needs to sign up or re-enroll by December 15, 2014. For more information about your health insurance options visit www.choosehealthde.com or www.healthcare.gov.

 

If you have health insurance through your employer your open enrollment period may be going on now, or may begin soon. Pay close attention to the deadlines and be sure to give yourself plenty of time to review your options. There’s much more to consider than the monthly premium alone. Make sure you review the deductible; sometimes paying a little more in premiums will make for a much lower deductible.

 

If you are traveling, be sure to take your health insurance information with you. Always keep a record of your medications, and if you’re flying, it’s usually safer to keep medicine in your carry-on since luggage can sometimes be lost for days—if not forever. Remember, if you need to seek medical care and you’re out-of-network you will likely be subject to higher co-pays and/or deductibles. If you need medical care for a non-emergency issue find a local urgent care clinic or medical aid unit, which will typically be cheaper than an ER visit.

 

For more information about insurance visit www.delawareinsurance.gov

 

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For more information: Jerry Grant 302-674-7303