The New York Times ran an interesting piece a few days ago pertaining to the liability of homeowners insurance for folks who rent out their homes part-time through popular sites like AirBnB. Though, the AirBnB site is catered to people unlike those of a “live-in landlord”, the article did briefly mention renting out individual rooms to roommates.
Liability of homeowners is a big concern for us folks that rent out the individual rooms as I receive several e-mails per week on the issue. What I find quite surprising and relieved reading about in the article is:
In the four years since Airbnb opened for business, it says it has not heard about a single liability claim or judgment over $10,000, or even an attempt at one. In that time, the company says that it has booked over five million nights of lodging.
Now of course, airBnB is a site where your entire residence is rented out to tenants as opposed to the individual rooms. I strongly feel that folks like me who are “live-in landlords” are less susceptible to claims and horrific incidences because we can better monitor our roommate’s activities, i.e. control them if they get out of hand.
I don’t know how this fits in with the five million nights of losing without an incident, the article linked to a homeowner’s epic ordeal when she rented her residences through AirBnB and found out she was completely ransacked. To alleviate situations like this in the future, AirBnB offers a guarantee to protect your personal items up to $50k.
Although, I’ve used AirBnB to rent properties while on vacation, I’ve never used AirBnB myself to list my house so I’m unfamiliar with the terms and conditions from a homeowners perspective. The article goes to state, “AirBnB makes it clear that it’s not liable for any any and all listings and accommodation.” This probably isn’t all too important for a renter, but as a homeowner renting out their property, it raises concern who’s liable in damages.
With that in mind it’s a no brainer that the article mentions that you shouldn’t be avoiding the home insurance issue. Back when I first started this venture, I contacted my insurance company and informed them that I was going to take on a roommate. The roommates situation didn’t deter my insurance company one bit. You can read about that interaction between my insurance company and myself here.
Again, the case in the article is geared more towards homeowner renting out their entire house for several months of the year versus renting out a single room while you’re still living there. I think insurance companies are a bit more relaxed in the latter case. Partly because while you’re still living in your residences and utilizing your current house as a place to live first then a commercial business. Secondly, as I mentioned before, you can monitor your roommates behavior to ensure nothing is going to adversely affect your home.
For homeowner starting out on the renting out rooms venture, it’s definitely a wise choice to inform your homeowners insurance.