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 establishment, 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 Florida cities and counties where this type of home-sharing rental service is allowed and where it does not 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.
First and foremost, it is important to always be upfront with your insurance agent or company about how a home is being used. 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.
However, there are insurance options available to meet the needs of those with a home-sharing rental. 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. This type of policy covers the home, structures and contents (appliances and furniture) on the property owned by the homeowner, as well as, lost rental income due to building damage, legal fees and liability protection.
Accidents can happen at any point in time 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 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. However, it is important for all homeowners to properly research their local laws and ordinances and to look at the risks involved from an insurance perspective.
For homeowners considering listing their property as a home-sharing rental, I strongly recommend that you speak with your insurance company for questions and information regarding your individual situation.
For additional guidance, the National Association of Insurance Commissioners (NAIC) offers a consumer alert on this topic at: www.naic.org/documents/con sumer_alert_home-sharing.htm. For 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 is Florida’s insurance commissioner.