Short-term rentals give homeowners a relatively easy way to generate extra income, and they’re becoming more and more popular thanks to home-sharing sites that connect homeowners and guests from around the world. Before renting out your Montgomery, Massachusetts home for a weekend or week, though, first check your homeowners insurance policy. Without the proper coverage, a short-term rental could cost you if something goes wrong.
Before Listing Your Montgomery, Massachusetts House for Short-Term Rental, Check Your Homeowners Insurance
Homeowners Insurance Policies Sometimes Cover Occasional Short-Term Rentals
Insurers generally realize that some homeowners want to take advantage of the income-generating opportunities that short-term rentals can provide. They know that a portion of homeowners will want to rent out a spare room or their entire house for major sporting events, graduation, and move-in weekends (in college towns) and holiday weekends. Some homeowners even list their house when they’re going on vacation regardless of how much demand there is for lodging at that time, and insurers know this.
In order to accommodate homeowners who are interested in short-term rentals and house sharing, many insurance companies provide coverage for occasional short-term rentals. Some insurers take the risks associated with short-term rentals into account when underwriting home insurance policies and include coverage for short-term rentals within their policies’ standard coverages. Other insurers don’t offer this coverage in their standard policies but let homeowners purchase coverage for short-term rentals through an endorsement. An endorsement is an add-on that expands a policy’s protections in a specific way. Because endorsements typically have narrow terms and conditions, they’re often quite affordable.
Exactly what is considered a short-term rental and how often homeowners can rent out their house varies from policy to policy (also, a few policies may not provide coverage for short-term rentals). Therefore, you should read through the terms and conditions of your policy to determine whether your particular homeowners insurance policy will cover your short-term rental.
(Policies that provide coverage for short-term rentals sometimes require homeowners to notify their insurer prior to renting their house. Depending on the terms of your policy, you might need to give your insurer a general notice that you’ll be listing your Montgomery, Massachusetts home on house-sharing sites, or you may have to let them know the specific dates that someone will be renting your place.)
Homeowners Policies May Not Cover Multiple and Longer Rentals
Fewer home insurance policies provide coverage for multiple short-term rentals or longer rentals. For example, renting out a waterfront home for July Fourth weekend might be covered by a policy, but renting the house out each weekend in the summer or for the entire summer vacation season is less likely to be covered. These scenarios are more likely to be viewed by insurance companies as sources of regular income, and they may, therefore, not be covered by a home insurance policy that’s meant to be a type of personal insurance.
If the rental or rentals you have in mind exceed your current home insurance policies coverages, you might be able to find a different homeowners policy that will cover your rentals. You might, however, have to purchase a landlord’s or business insurance policy to cover your rental situations.
An Independent Agent in Montgomery Can Check Your Home Insurance Coverages
For help figuring out whether your homeowners insurance policy provides coverage for short-term rentals, contact an independent insurance agent who serves Montgomery, Massachusetts. An independent agent will have the expertise to review your policy and help you understand your coverages. If you need to purchase an endorsement or different policy before renting your home, they can look at solutions from different insurers and help you pick the best one.