Many homeowners rent out their property in order to make some extra money on the side. Whether it's an extra room or an extra house, it's a very popular way to pay for some of their mortgage. However, there are a few details these homeowners need to review before renting their homes out, because it can affect their insurance.
What is the homeowner liable for?
If a renter is injured on your property, a typical homeowner's plan may not cover you. Review your policy for liability coverage. In many cases, the coverage does not extend in this situation, so the owner might have to pay medical expenses for an injured renter.
Is it a home, or a home-based business?
If a homeowner is consistently renting a place out, then this may not be covered under standard homeowner policies. Insurance policies are different for home businesses than for typical dwellings. The homeowner can check with their insurance agent or carrier for the appropriate policy as the home may be considered a bed and breakfast.
How long will the property be rented?
Policies for homeowners can vary by state and by carrier. A one-time rental is more likely to be covered. However, a homeowners policy may not cover you if you are renting the home out over the long term.
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