Renting Out Your Home thru Airbnb and What Home Insurance Covers
Airbnb, VRBO and other Weekly Rental Programs
Short Term Rentals is a hot market, and it seems everyone wants in. Before you jump make sure you understand what changes you may need to make and what it may cost in insurance and time.
Most insurance companies DO NOT want you to rent your home or vacation property on a weekly basis. Here In Massachusetts it’s no different. In fact, I can almost bet your current coverage will not cover the Airbnb exposure. So if you do want to make a little extra money renting your home, part of your home or vacation property here is what you need to know.
- $1,000,000 Liability Required – In Massachusetts you must carry at least one million in liability, and it MUST be endorsed to cover the weekly rental exposure. Most states have adopted this requirement. Airbnb may offer some kind of coverage, but it’s not there for the times you don’t rent it through them or while it is not rented. You still need your own coverage.
- Your Coverage May change And It May Cost More – Unless you plan to occupy the property while it’s rented your policy may change and your premium will increase. At the very least you’ll need to add a weekly rental endorsement and that may be minimal in cost, but it may also be limited in the amount of weeks per year you can rent.
- Your Insurance Cost May Go Up – Chances are if you plan to rent property you once used exclusively for you and your family, you’ll end up having to change your coverage to something more specific to a rental property risk. This will be more expensive than a typical homeowner’s policy.
- TAX TIP! – According to the federal government you can rent your home or part of your home up to 14 days a year and not have to report the income! Some carriers also will allow up to 14 days a year. If you plan to rent, make sure you do you contact your agent to confirm if you have coverage for renting your home.
The insurance industry is still trying to figure this market out so there’s not many available options for coverage. Your standard insurance company is most likely unwilling to offer you the coverage you need to start renting on a weekly basis. However, lucky for you we have carriers that can.
For more information on Massachusetts (sorry that’s where we are) state regulations and other boring stuff click here. For a quote on the coverage, you need just click the button at the bottom of this screen!