Am I Covered?
With apps like Airbnb and Homeaway, home-sharing has become an increasingly popular source of income for millions of people. Home-sharing services connect travelers looking for short-term rentals, ranging from spare bedrooms to entire homes, with homeowners looking for some extra cash. However, home-sharing services have also created new concerns and financial risks for policyholders.
Traditional homeowners’ policies are not designed to cover accidents arising from property rental, and insurance companies generally deny coverage for any resulting claim. In response to new exposures created by home-sharing, the Insurance Services Office (ISO) developed its own series of endorsements that have been filed and approved in most states. Some of these ISO endorsements are mandatory; they simply reinforce the longstanding scope of traditional homeowners’ coverage and clarify exclusions to specifically preclude coverage related to home-sharing. Other ISO endorsements were created to replace these amendatory endorsements; these endorsements are optional to purchase and provide home-sharing coverage for an insured.
ISO developed amendatory endorsements for each of its homeowners’ policies. These mandatory endorsements specifically exclude home-sharing activities unless broadening endorsement coverage is purchased. These amendatory endorsements reinforce that coverage is not extended to:
- Personal property of home-sharing occupants
- Personal property of another person occupy the residence as a result of home-sharing activities
- Personal property in a space rented or primarily held for rental to a home-sharing occupant
- Personal property in a home used primarily for home-sharing activities
- Fair rental value arising out of or in connection with home-sharing activities
- Losses because of theft, vandalism or malicious mischief resulting from home-sharing activities.
Broadening Home-Sharing Host Activities Endorsements
In addition, ISO developed separate coverage endorsements to provide coverage and protection for home-sharing hosts. These optional endorsements address a number of exposures created by the mandatory amendatory endorsements that home-sharing hosts face, including: liability, theft, vandalism, and lost rental income, and other damage to property. Although these endorsements broaden coverage, they are also subject to and array of exceptions and limitations. For example, it does not cover property of a home-sharing occupant or any other person occupying the “residence premises” due to “home-sharing host activities.”
As always, it is important to check your policy to see what you are and are not covered for. If you are considering renting your home or a portion of your home through an online platform, it is critical to purchase a broadening endorsement.
Ivo Labar and Dan Veroff are trial attorneys at Kerr & Wagstaffe LLP specializing in insurance policyholder rights. To learn more about the attorneys and their insurance practice, please explore the links at the top of this page.
 The Insurance Services Office, or ISO for short, is an organization that helps insurance companies craft policies, among other services. ISO’s extensive database of industry-related data allows them to predict losses more accurately than many insurers. ISO’s policy forms are considered the industry standard, and are typically used “as is” by insurers or as a starting point for developing their own.