The Real Cost of Home Sharing

Rent-by-owner home sharing is an exciting new concept that has created a fast and convenient way to save money on lodging, while allowing homeowners to capitalize on their investment. At a glance, it seems like an enticing win-win exchange, but lately homeowners have been discovering that the convenience may come at a cost. While, in most cases, the homeowner’s experiences end up being uneventful, there have been several problematic situations over the past few years.  These have inspired insurance companies to remind their customers of the inherent risks and responsibilities involved with a ‘shared economy’ room rental service. It is for this, and many other reasons that we suggest you speak with your insurance agent before using your home as a lodging facility.

Although all situations need to be evaluated on a case by case basis, most homeowner’s insurance agreements do not provide coverage for business use. First and foremost, it is important to check the terms of your specific policy. Keep in mind that not disclosing your intent to use your property in this manner to your insurers often impacts your coverage and even puts your existing coverage at risk. 

Although some of these home sharing companies may offer a liability coverage plan for no cost to the host, you should always talk to your agent first to ensure you are truly protected. Certain risks are often unaddressed by the home sharing organization, therefore, if you are considering putting up your own property for rent, it is imperative that you confirm with your personal insurance agent that you are fully covered. 

If you still wish to get involved in a home sharing program there are steps you can take to lower your risk. Simple things like relocating valuables are a great place to start, however, more important steps may require more substantial efforts. For example, it is important to make sure your home or apartment adhere to your state’s safety standards, which some home sharing companies do not require verification of before you enter your home into the program. These safety standards may include proper safety exits, sprinkler systems, or smoke detectors. There have even been cases where people who have stayed in a rent-by-owner home have been exposed to carbon monoxide poisoning. If such an oversight were to occur, the burden of liability will fall first on the homeowner, supporting the argument that it may not be worth the risk if such provisions are neglected. Despite these risks, home sharing can be a lucrative and fun endeavor, if you cover your bases and speak with a representative from your homeowner’s insurance provider first. When considering entering your property into home sharing always be mindful of your liability, and the amount of risk you are willing to assume.