There are several popular events being held in the Milwaukee area in 2020. Summerfest starts in June, the Democratic Convention is in July, and the Ryder Cup is at Whistling Straights in September. This has some homeowners asking the question, “Should I rent my home during these events to make a little extra money?”
Renting homes on sites like FlipKey, Airbnb, or HomeAway offers residents a way to make passive income from the property they already own. But if you have been considering renting out your home, there are probably several questions you’ll need to be answered first — especially those related to insurance coverage.
Below, we’ll touch on some of these questions and answer them so you can feel more prepared should you decide to go forward.
FAQ About Home Rental With Sites like Airbnb
Can anyone rent out/host their home?
For the most part, yes. As long as you own the property, you can definitely sign up on a site like Airbnb, HomeAway, FlipKey, or VRBO. You’ll be required to follow the rules and regulations of each site.
Keep in mind that if you are renting an apartment or home, you must first look at your lease or speak with your landlord if you’re thinking about renting it out. Most leases dictate that subletting is prohibited; however, it’s possible you may be able to work out an agreement with your landlord in which you pay a higher rent or split your hosting earnings with them.
What’s important to remember here is that you want your renting experience to earn money for you, not cause you to go bankrupt. If you’re losing all the money you earn paying your landlord and buying added insurance, and you’re spending all your time cleaning and organizing the space for renting, you probably won’t be getting a beneficial return.
What type of insurance do I need if I rent out my home just once?
If you’ll only be renting out your home once, it’s possible your homeowner’s insurance policy may cover you. However, you’ll still need to speak to your insurance agency directly to ensure this is the case.
Furthermore, even if you’re sure your policy will cover a one-time home rental, you should speak with your insurance agent anyway. All insurance companies are different, and all policies are unique.
What if I want to rent out my home on multiple occasions?
If you plan on renting your home consistently on Airbnb or an alternative site, you’ll need to plan on getting additional insurance. It’s unlikely that any insurance company would allow your homeowners plan to cover you when renting out your home like this as the scenario presents many more risks.
In select cases, you would simply need business insurance as your practices would be business-related. But more likely, if you are renting your home (or another property you own) on a long-term basis, this would mean you are essentially acting as a landlord. Therefore, you’d need to obtain landlords insurance or a rental dwelling policy — both of which will cost you.
Why won’t the Airbnb/host platform insurance cover me?
Many homeowners assume that they can simply use the insurance provided by the hosting platform to cover them in the event of an accident or emergency. Unfortunately, if you read the fine print, you’ll see that these insurance plans are only good for liability claims. In other words, they protect you if someone is injured while staying in your home and decides to sue you.
While this is certainly helpful for liability situations like this, it’s far more likely that the coverage issues you’ll face when renting will have to do with damage to your property or theft. And in these situations, host platform insurance will not protect you, leaving you with large coverage gaps.
Ask Your Insurance Agent About Your Options
What we hope you take away most from this article is that renting out your home can be a lucrative endeavor (if you’re ready for the challenge); however, making sure you’re covered insurance-wise will be something you’ll need to look into.
We advise that you speak directly with your insurance agent to find out more. At Philleo Agency, we would be happy to sit down with you and discuss your options at any time.
