What is your Risk of Renting a Room?
Are you renting just one room in your house via AirBnB for a daily fee (or any similar online rental service)? If you did not tell your current property insurance carrier, then most losses such as your house burning down while renting out the side bedroom or basement will probably not be covered at all. The preferred insurance carriers (which we shop at 14 preferred carriers) do NOT provide this coverage (believe me I looked into it), yet the good news is we have one great insurance company that will provide coverage. With all things in life it is more expensive, yet not going to take too big of a bite out of your AirBnB rental expense budget. Renting out your spare bedroom will still be profitable.
However, if you have an entire rental property or AirBnB rental unit then that could be covered, just make sure you are honest with your current property insurance carrier! That is a similar, yet different policy since you are not living on the premises.
I read the AirBnB online insurance overview that says they cover up to $1M in damages as long as you are sued. However, from an in-depth overview of claims being denied (from online reviews of the AirBnB insurance, check it out yourself) by their insurance and the property owners insurance are you willing to take that risk? I would suggest being honest with your insurance company and reporting it, but if you do get the claim covered that one time, the insurance carrier may likely cancel you (so come to us first and we will get you set up correctly). If you get canceled it means other preferred carriers will not accept you, I swear its collusion, yet don’t shoot the messenger. Then you would have to go to the Surplus Lines market to get a more expensive policy at renewal, which is like being sent to the principals office, never a fun or easy process.
Good to Know about Property Claims
When you do file a property claim the carriers look at things in a similar fashion. If you file two claims within a 5-year period you will likely be canceled by your property insurance carrier. So when you decide to file a claim it’s probably best if it’s actually a more substantial claim. We will never ever advise you to refrain from filing a claim (legally we will never do this), yet will give you guidance whether it makes sense, then it is up to you and we will follow whichever decision you make.
For example, lets say you have a $1,000 deducible on your house. If you have a $2,000 minor water claim for a bathroom sink ruining your floor this may be something to consider just paying for on your own. Yet if you have the same situation that causes $20,000 in damage you definitely want to file a claim. In general, with any type of insurance it is recommended to do something and proceed with purpose when dealing with insurance companies one way or another.
Hope this tips help and we are here to assist you with your insurance needs. Give us a call at 425-802-2783 if you have any questions.
Gary Franke & Tamara Chandler
Independent Broker
12505 Bel-Red Rd, Ste 106
Bellevue WA 98005
(425) 802-2783
gfranke@basinpacific.com