As peak rental season approaches, many homeowners explore renting out their properties to earn extra income. Whether you’re considering listing your home for a few weeks or turning it into a seasonal rental, it’s critical to understand how these decisions can affect your homeowners insurance. The duration, frequency, and platform used for renting can all significantly impact your coverage.

Below are key considerations and proactive tips to help ensure your home remains properly protected:

1. Notify Your Insurance Broker Early

Always inform your insurance broker of your intent to rent. Failing to do so may result in denied claims, cancellation of your policy, or gaps in coverage. Even one short-term rental could violate your current policy terms without proper disclosure.

2. Clarify How the Home is Classified

Insurance carriers often distinguish between Primary, Secondary, and Rental properties. Some insurers will not allow rentals of primary residences or impose stricter requirements. Confirm how your property is categorized and how this affects rental use.

3. Frequency and Duration Matter

Seasonal or Long-Term Rentals (e.g., a summer tenant for three months) may be allowed with proper underwriting.

Frequent Short-Term Rentals (e.g., weekly or nightly through Airbnb or VRBO) are often classified as a business exposure, which can void coverage under a standard homeowners policy.

Ask your broker if you need a Landlord policy or a Commercial policy depending on rental activity.

4. Home-Sharing Platforms Come With Risks

If you’re listing your home on Airbnb, VRBO, or similar platforms:

• Carefully review the host protection programs they offer, these are not substitutes for proper insurance.
• Many standard policies exclude home-sharing activity, so you may need a home-sharing endorsement or specialty coverage.

5. Require Tenants to Carry Liability Insurance

Always ask tenants to provide proof of renter’s liability coverage. This can protect you in case of accidental damage or injury on the property. Consider requiring:

• A minimum of $300,000 in liability coverage.
• You and your property listed as an “additional interest.”

6. Reassess Your Umbrella Coverage

Renting out a property increases your liability exposure. Confirm that:

• Your Excess Liability (Umbrella) policy lists all properties.
• You have adequate coverage limits—many experts recommend at least $1–$2 million for landlords or those using short-term rental platforms.

7. Consider a Dedicated Landlord or Short-Term Rental Policy

In many cases, a standard homeowners policy won’t cut it. Explore:

• A DP-3 Landlord policy for longer-term tenants.
• A Short-Term Rental policy designed for high-turnover, furnished rentals. These policies often include loss-of-rent coverage and additional liability protection.

8. Take Safety and Maintenance Seriously

Frequent use by guests can increase wear and tear or introduce new risks. Be proactive:

• Install working smoke and CO detectors on every level.
• Regularly inspect and maintain railings, decks, and walkways.
• Use smart home tech (like leak sensors or remote thermostats) to monitor property conditions when unoccupied.

In Conclusion

Renting out your home can be financially rewarding—but it requires more than just creating a listing and handing over the keys. Proactive communication with your insurance advisor is essential to make sure you’re covered before guests arrive. The right insurance strategy will give you peace of mind and protect your investment.