With Florida’s plentiful sunshine and warm weather, visitors come from all over the world to enjoy the many outdoor activities, historical sites and attractions offered by our state. According to data from VISIT FLORIDA, an unprecedented 98 million visitors came to Florida in 2014.
As an alternative to staying at a hotel or bed and breakfast, a growing number of those visitors will take advantage of websites or mobile apps designed to connect them with homeowners offering their home, apartment or condo as a vacation rental destination. Some of the websites and apps that help visitors locate such a rental property include Airbnb, Roomorama and HomeAway.
In cities where this type of home-sharing rental service is allowed and where it doesn’t violate local zoning or housing laws and regulations, a homeowner is urged to carefully consider their insurance coverage and whether they are fully protected for all circumstances that may arise.
Although it varies, a homeowner’s policy usually excludes or provides limited coverage for a business operating out of a home. When income is being earned from a home-sharing rental, it may change the use of a home to a home-based business and the insurance company could deny coverage.
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However, if the home is only rented on occasion, the insurance company may be willing to offer an endorsement onto the homeowner’s policy at an additional cost. If the home is rented on a long-term basis or rented out frequently, purchasing a landlord insurance policy (rental coverage for landlords) may provide another option.
Accidents can happen at any point, even with the best safety precautions in place, so it is prudent to consider potential injuries suffered by a guest or damages caused to the home or a neighbor’s property by a guest. These create liability concerns that might require a homeowner or the guest to be held responsible for costs requiring legal representation.
As further protection, it may be advisable for homeowners to rent to guests who currently already have a homeowners or personal liability insurance policy and to request proof of that insurance before a rental agreement is signed. In the event the property is damaged, the homeowner could then file a claim under the guest’s own insurance policy.
In the right circumstances, a home-sharing rental option can help to supplement a homeowner’s income while also providing a positive experience for visitors enjoying a stay in our state.
For additional guidance, the National Association of Insurance Commissioners offers a consumer alert on this topic at: http://www.naic.org/documents/consumer_alert_home-sharing.htm. For more insurance information or to search for a licensed insurance agent, visit the Department of Financial Services website at:www.myfloridacfo.com and to search for a licensed insurance company, visit the Florida Office of Insurance Regulation website at www.floir.com.
Kevin McCarty, Florida insurance commissioner, Tallahassee