These days, a large and growing number of consumers across the country are choosing to put their homes, or individual rooms of those houses, up for rent for a night or two (or more) with regularity. However, some experts are growing concerned about the impact such a decision could have on the home insurance policies of such owners, and some are finding their plans changed or canceled as a result. As such, agents would probably do well to talk to consumers about the risks they might be taking on when they rent their properties.
Services like Airbnb – which allow homeowners to rent out rooms or their whole houses to people online – have grown quite popular in the last few years as an alternative to hotels, according to a report from the New York Times. However, those in the home insurance industry say that this proves to be an extremely risky proposition that will significantly impact their coverage in a negative way.
What can happen?
If policy issuers find out that this kind of thing is going on with a property they insure, the homeowner could find their premiums on the rise, the report said. In some cases, the insurance company might even cancel the policy altogether.Airbnb says that instances of this actually taking place happen very rarely, and that it provides those who rent their properties with insurance of their own on top of what the homeowner already has. However, this might not be enough for some insurers.
“The property owner changed the way she used her home on a fairly regular basis,” said Rachael Risinger, a spokeswoman for such an insurance company, told the newspaper in an emailed statement about a specific homeowner who went through this difficulty. “Renting rooms in a home brings exposures that an individual and insurer should mitigate. Homeowners insurance is intended for owner-occupied properties and we do not anticipate regular renting of a home under our current policy.”
Agents who can help consumers to understand the way various decisions they make about their properties – including renting out all or some of it on occasion – may impact their liability, will typically be the ones with the highest customer satisfaction ratings. A good relationship with a consumer can often go even farther for agents than simply being able to provide the occasional discount, and that, in turn, could translate into better retention rates going forward.