In an ever-changing society, some things slip past us, and before we know it, what we thought we knew is no longer factual. In the case of home-sharing, the nuances can be confusing to keep up with.
If you’re looking to rent out space, be warned: home-sharing coverage is still expanding and whether or not Airbnb is covered is up to insurance companies. So if you are determined to make a little extra income, know that your insurance may not approve of you renting out your space. So be sure to communicate with your insurer beforehand to see what benefits fall under your home insurance.
Companies That Cover Airbnb
Homeowner’s insurance is a package policy that covers the interior and exterior of homes as well as loss or stolen property. It also protects visitors to the home from anything that may harm them during their visit, like pets or infrastructure.
Due to regulations being placed on Airbnb because of changes to the landscape of the renting industry, you won’t see many home insurers cover it. In the US, Airbnb coverage depends on the company you’re with.
What to expect from Airbnb regulations by state
Most importantly, the state you reside in has a say overall. You will find many places with lax laws, but larger, more tightly packed states seem to have stricter rules in place. The following are just a few circumstances to expect:
· New York City, New York
Since 2019, New York has struggled to define the difference between renting or “to help make ends meet” which is an argument Airbnb used in its lawsuit against New York City. Vox reported on Airbnb’s win after a judge agreed with Airbnb that it “violated hosts’ Fourth Amendment right against illegal searches.”
Their battle will likely continue for years into the future, as the city has an interest in monitoring the housing shortage crisis and protecting short-term rental laws. As of now, most short-term rentals are illegal in New York City.
· Denver, Colorado
The city and county of Denver require residents to obtain a license for short-term rentals that must be renewed. Residents can only have one primary residence and can only allow a 1–29-day stay at the primary residence only. The licensee must also have a million in insurance at all times or be aligned with a platform that covers the amount as part of their service agreement. Taxes and fees are included for all licensees.
· Los Angeles, California
Since 2019, home-sharing has been allowed in LA, but not without restrictions. Just like New York, only primary residences can host short-term renters. LA defines a primary residence as a place inhabited for at least half the year.
As for short-term rental, it is defined as a month in the city of Los Angeles. In total, you are allowed to rent for 120 days of the year, but it is negotiable. Taxes and fees apply, and hosts must register with the city, keep records, and maintain safety in the home.
What to expect from your homeowner’s insurance
There are many ways that cities go about regulating Airbnb, but the process starts once you file a claim. According to the Insurance Information Institute, Homeowners insurance protects against any theft or damage and in turn protects those who enter the home.
The claim is carried out with a representative that will arrive to assess the damages. They will provide a sum for you in the form of a deductible, which is the agreement under your policy to partially cover the cost of your claim before your insurance pays the rest.
The amount you will have to cover will differ by insurer. You can negotiate this by submitting proof of losses to an insurance adjuster, so make sure to document the damages, too, to maximize your claim. Otherwise, it is up to the homeowner to find a company that offers complete coverage; you may have to cover an overwhelming majority of the cost from perils, if not.
If a home is destroyed by certain natural disasters like earthquakes and flooding, most policies are unlikely to cover them. Fortunately, some can be attained in a separate policy. Ultimately, a combination of state and company policy will determine the possibility of Airbnb coverage.