Soooo….You just purchased a great condominium on Fort Myer Beach, FL. You purchased the property with your Mom and Dad. You intend to use the property about 6 weeks out of the year and then list the condo for rental with a local Property Manager/ Realtor, AirBNB, HomeAway or other home sharing rental company. You actually calculated the rental income when making the purchase decision. This sounds great…..
Until you call your insurance agent……When homeowners or renters head to a home-sharing website to rent out their homes in exchange for income, “most probably do not think through the fact that they’re beginning to engage in a commercial endeavor”.
Homeowners and condo owners insurance policies will have language that excludes “business pursuits”….renting your property for income is a “business pursuit”. And as soon as an owner creates a business exposure in their home, their homeowners insurance carrier can not only refuse coverage for a related claim—they also have the right to suspend all liability and property coverage.
The Liability Exposure created by “renting” is huge and needs to be a primary consideration. The “home-sharing businesses” will most likely require you to have Liability Coverage. If they offer some level of Liability Coverage with the “for rent contract”, the language should be reviewed closely, possibly by your attorney. You will be wise to secure your own liability and property insurance with all owners listed as “named insured”. In the case of a condominium, the Association may require proof of insurance and be listed as a “additional named insured”. If your property is located outside of the USA, be very careful…protecting your assets will take careful planning.
Personal Umbrella Liability policies will not extend to this “Rental Property”. This is considered a “Commercial” risk and requires a Commercial Umbrella Policy. Discuss this important “gap” with your insurance agent.
We offer Property and Liability Insurance coverage designed for these rental situations.
Call us at 239-265-9577.