Do you have a second property or a tiny house that sits empty most of the year? If so, you may have considered renting it out to earn side income to pay off the mortgage or save for a dream vacation.
Renting your home to strangers can feel daunting, not just because your home is a major investment, but also due to personal liabilities in situations of injury or property loss. But the trend of renting out second homes is not going away anytime soon. Airbnb reports having 5.6 million active listings worldwide and claims to host half a billion people each year, proving that the market is advantageous for homeowners.
So, how can you jump into the trend while protecting yourself and your property? Read to learn why homeowner’s insurance is vital for any homeowner, including those who want to rent their property.
Protection From Sticky Fingers
Unfortunately, theft happens. Before you list your property for short-term rental, go through each room and closet to find any one-of-a-kind valuables like family heirlooms or photo albums, and move them to your primary residence. Take it a step further and remove any personal items and expensive décor from the property as well.
Once everything has been removed, document the remaining linens, decorations and supplies you are leaving for your renters to use. This way if something disappears, you’ll know exactly what was taken/damaged.
Where there’s potential for financial reward, there’s a risk for personal expense. Airbnb or Vrbo renters can expect some normal wear and tear from renting out their property, but severe damage is sure to be a concern.
While major damage is rare, there are still instances where guests have hosted destructive parties outside of the terms of the agreement. One Airbnb host endured $40,000 in damages after guests hosted an unauthorized party on her property.
From broken stair railings to damaged carpet to a house fire that destroyed the host’s home, Airbnb hosts have seen it all. And while companies have protections for hosts, it’s often not enough to cover the full cost, which is where homeowner’s insurance can protect you.
As we’ve covered, it’s clearly important to protect your property from theft and damage, but protecting yourself from being sued due to personal injury also needs to be on your radar.
Consider going through your home and looking for anything that could cause personal injuries, like a wobbling railing or a door that sticks and needs to be brute-forced. You’ll want to fix these issues before listing your property. Small things like these can become major problems if a guest becomes injured trying to use them.
And unfortunately, the amazing features of your home that might attract guests can also cause accident injuries, like pools, hot tubs and even fireplaces. Consider making a note on your listing that the fireplace cannot be used and buy a pool cover (especially if you are renting to families with young children) to protect yourself.
Check your home insurance policy for liability coverage that can protect you from heavy medical expenses and legal fees in case of injury and make sure the coverage is enough.
SFM Insurance Has Your Back
Buying home insurance doesn’t have to be complicated. SFM Insurance is here to help you find the best homeowner insurance for your short-term rental property that will protect your possessions and your wallet.
We personally know how important it is to feel secure in coverage that was built with your specific needs in mind instead of a cookie-cutter policy that so many other insurance companies offer. Contact us for a free, no-obligation discussion about protecting your assets today. For more tips and our latest updates, visit us on Facebook, Twitter or LinkedIn!