Have you ever thought about renting out your second home or vacation property to make some extra cash? If so, you’re definitely not alone. People all over Wisconsin and the rest of the US have started using popular home sharing sites like Airbnb to rent out rooms in their home or even their entire house on a revolving basis. This can be a convenient and cozy alternative to checking into a hotel room when you travel and a good source of extra income for certain homeowners. But alternatively, if you don’t have experience as a landlord, short-term renting can be a huge investment of your time.
Another factor that many homeowners fail to consider when thinking about joining the home share bandwagon is the fact that your typical home insurance policy doesn’t cover rentals. So in addition to putting in the time and money to transform your vacation home into a stellar rental, you’ll also need to make some changes to your insurance coverage. Think you’re ready to take the plunge with Airbnb? Continue reading to learn more about home insurance and rental properties.
5 Fast Insurance Facts You Should Know Before Renting Your Home
1. You Probably Need Additional Coverage
While your home insurance policy is tailored to meet the needs of your family, it probably won’t be suitable for covering damages that are associated with renting. Speak to your independent insurance agent before inviting your first guests into your home. With the right policy in place, you can protect your assets, your guests, and your bank account.
2. Are You Operating a Business?
Plenty of cities across the US now require that short-term rental homeowners must carry a business license. In fact, tax codes have also changed to require short-term rental owners to file their income taxes with business Schedule C as well. However, if you are interested in long-term renting these changes don’t apply to your situation. Aren’t sure how to classify your potential rental? Ask your insurance agent if you need business insurance protection.
3. Invest in Landlord Insurance
One thing’s for sure, if you plan on renting out your home for any length of time, landlord insurance is a great coverage option. Typically, landlord policies include liability coverage, as well as property damage and loss of income protection. It may also be helpful to look into the benefits of flood insurance and dwelling fire insurance too.
4. Protect Your Personal Belongings
If you are leaving any personal belongings in your home, you’ll need to protect them with proper insurance coverage. Everything from furniture to appliances and even outdoor assets like fire pits and patio furniture should be protected in the event of an accident or other damage from your renters. Be sure to discuss the best options with your insurance agent.
5. What About Renters Insurance?
While hosting services like Airbnb does offer some level of insurance protection for renters and homeowners, it’s a good idea to require that tenants who will be staying for an extended period of time have renters insurance. This important insurance option is designed to protect a renter’s personal belongings in the event of an accident or natural disaster.
Final Thought: What About the Neighbors?
In addition to requiring a great deal of your time and money, short-term rentals can have an impact on your neighbor relations. If you have close neighbors to your property, you may want to re-think short-term rentals, as the influx of new people into the area each month can be a big problem.
Contact Smith Insurance and Financial Services Today
Interested in learning more about the benefits of a comprehensive home insurance policy? Visit our friendly and knowledgeable team today for more information and be sure to request a quote.