LYNN HAVEN, Fla. (WMBB) — With home swapping and Airbnb gaining a lot of popularity in recent years, insurance companies are warning homeowners about the risks involved.
Bill Hinson, agency manager of Farm Bureau Insurance said proper insurance is important to protect yourself in case of injury.
“If the property is used solely for rental, then it’s either going to be defined as a long-term rental (meaning a year or longer) or short-term rental (meaning less than a year),” Hinson said.
“If they buy insurance for that purpose then that is fine, but if they have a home for a primary residence and they decide to rent that home out without purchasing other insurance, their liability coverage is excluded,” Hinson said.
Hinson said insurance companies are writing in a new language to give homeowners the opportunity to cover themselves in case of an injury — even when swapping your home.
“If you had four people renting your house for four weeks and they had a dog, and they invited other guests over, and that dog bit somebody, you’re responsible because you rented them that home,” Hinson said, “even though it’s not your dog.”
Hinson said the purpose of liability coverage is to protect you during those types of situations.
“Your insurance will defend you in court and pay whatever the judication is, up to the limits of the coverage,” Hinson said. “That coverage is excluded for rental or business use of your home unless you go out and purchase that coverage.”
Hinson said in addition to the liability exclusion, your insurance company might also decide to cancel your policy if they discover you are using it for a business purpose.
He said if someone is ready to get into the short-term rental game, they should get an insurance policy first.
“They should buy a policy that covers that particular risk,” Hinson said.”
Hinson said short-term coverage is available but it usually costs a little bit more but they will be covered.