How to Stay Covered When Renting Out Your Home

How to Stay Covered When Renting Out Your HomeIn this age of Airbnb, more and more people are renting out their homes or parts of their home for a little extra income. However, with the extra cash comes an extra set of risks, and a standard homeowners policy may not be adequate to completely cover you as you rent out your home. Depending on your situation, a specialized insurance policy could be what you need.

Whether you’re leasing a second home to tenants, renting out a spare room periodically, or renting out a beach cottage for a season, before opening up your home to new residents you need to consult with a Connecticut homeowners insurance professional.

Short-Term Rentals

Renting a portion or all of a primary residence for a brief period of time, such as a week or several weekends, will normally bring about one of two main insurance scenarios.

You may be allowed a short-term rental, which is assuming the tenant has notified the company, or required to present an endorsement to your existing insurance policy in order to receive coverage.

However, renting a primary residence for short periods on a regular basis to various guests would be considered a business. Standard homeowners insurance policies do not provide any coverage for business activities taking place in the home. Proper coverage in this case would require a business policy.

Long-Term Rentals

Leasing your home to one person, a couple or family for six months or longer will most likely involve a landlord or rental dwelling policy. Landlord policies generally cost slightly more than a standard homeowner’s policy due to the increased protections. Renting out a vacation home or investment property on a regular basis, would also require a landlord or rental dwelling policy.

Landlord policies provide property insurance coverage for physical damage to the structure of the home caused by fire, lightning, wind, hail, ice, snow and other serious damage. They also offer coverage for any personal property left in the residence for maintenance or tenant use, such as appliances or outdoor equipment. This policy includes liability coverage if a tenant or a guest of theirs gets hurt on the property, covering all legal and medical expenses.

Most landlord policies provide coverage for loss of rental income if you’re unable to rent out the property while it is being repaired or rebuilt due to damage from a covered loss. This coverage is generally provided for a specific period of time. Contact a Connecticut homeowner’s insurance agent to discuss designing a policy for you.

Renters Insurance

Your insurance coverage is only regarding the structure itself and your financial interest in it. Your tenants’ personal possessions are not covered under your policy.

To avoid disputes arising from damage to the renters’ belongings, it is common for landlords to mandate renters insurance for tenants prior to the lease signing. If you are considering renting out your home on a regular basis, consider requiring this as an extra line of defense.


About Byrnes Agency

At Byrnes Agency, we offer auto insurance solutions that can be tailored to meet your specific needs. Whether you have an old classic car or a brand-new model, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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