AirBNB, VRBO and Home Exchange: Are there any implications to your home insurance?

Airbnb, VRBO and home swaps have emerged as a viable travel option for countless
vacationers. These alternatives provide short term resident seekers and vacationers
with the option of traveling with all of the amenities of home, without the hefty price tag
that can come from a hotel accommodation. It also provides home owners with
additional income where otherwise homes or rooms would remain vacant. The concept
is very alluring to those who have the space. In considering the viability of placing your
residence on VRBO, Airbnb or a home exchange with another homeowner, there are a
number of factor to consider … including your home insurance.

Vacation Rentals (i.e. VRBO)

Insurance companies normally view vacation rentals as a “business” and therefore they
are generally not covered under personal home insurance policies. Typically, a home
owner who is renting their vacation property should consider insurance designed for
property rental regardless of whether the property is a condo or a home. Generally this
is commercial insurance and not personal home insurance. In addition to liability
coverage, commercial insurance can encompass personal property, the structure itself,
items damaged due to vandalism or theft as well as income lost should the property
require restoration due to an unexpected event, such as hail.

Short Term Home Rentals (i.e. Airbnb)

The type of insurance you require when renting out your home or a single room, does
not change whether you are present or absent with your guests. If the Airbnb rental
property is your primary residence, your personal home insurance may not have the
appropriate liability coverage to reclaim your possessions as a result of vandalism, theft,
etc… However, there are riders offered by insurance companies such as Aviva
Insurance that can be added to your personal home insurance policy that can augment
your coverage. Much like a VRBO, considering an insurance plan that protects you,
your home and its contents will mitigate risks should an undesirable event take place.
Airbnb does offer supplemental insurance for their renters; however, it is not
comprehensive and should be reviewed in conjunction with your primary policy.

Home Exchange

Much like Airbnb, home exchanges are facilitated by a service company that provides
you a platform upon which homeowners can list their homes and ultimately connect and
arrange for a home swap with another homeowner. A home exchange involves the
sharing of each other’s homes for a particular period of time. Insurance companies are
generally pleased that your home is not left vacant while you are vacationing and the
occupants are seen as “guests” since there is not any exchange of money between
homeowners.

If you are considering placing your property on a VRBO or Airbnb or planning a home
exchange, it is encouraged that you speak with your Rizk Insurance Broker to ensure
your home and contents are properly protected as well as your liability coverage.

Do you have questions on this article or about home insurance in general?

Contact Rizk Insurance today and we’ll help answer any inquiries you may have.

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