Home-Sharing for Apartment Buildings and Condominiums

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PROTECTING YOUR PROPERTY ®

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Insights forYour Industry ® is published as a public service byAdjusters International, Ltd. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.

...“guests.”The endorsement extends liability coverage for bodily injury and property damage to home-sharing activities and adds coverage for claims of personal injury such as false arrest or invasion of privacy.

Network coverage

In addition to the coverage for short-term rentals available to tenants and unit-owners through their homeowners insurers, some online networks themselves provide insurance and financial guarantee programs to their users. These programs can provide compensation for losses to building owners and condominium associations, but you must review them carefully.

As an example, Airbnb provides a “Host Protection Policy” that includes $1 million in personal liability coverage. According to Airbnb, the program“covers landlords and homeowners associations in many cases when claims are brought against them because a guest suffers injury during a stay.”

While Airbnb’s Host Protection Policy only covers rentals made through Airbnb, a Homesharing Liability Insurance plan sponsored by Peers.org covers any rental made by an insured, no matter which method he or she uses to rent living space. The plan pays up to $1 million for liability to third parties arising out of a rental, plus up to $50,000 in lost rental income for a host that suffers at least $10,000 in property damage from a rental.

Choosing among options

In summary, property owners and condominium associations have several options for accepting and working with short-term rentals, which are obviously popular with prospective tenants and unit-owners.

There are three general courses of action, apart from allowing occupants to rent their units on an unregulated basis.

First, landlords and condominium associations can allow occupants to offer short-term rentals under a covenant or lease condition that permits home-sharing as long as an occupant maintains insurance that explicitly covers the property owner or association for damage or liability claims. A landlord or association gets no added benefit from this, but at least is protected while not restricting its market for prospective unit-owners and tenants.

Secondly, landlords and associations can allow long- term occupants to offer their units for short-term rental through a service arranged through the property manager or association. Landlords and associations share in the revenue derived by occupants, who have an incentive to market the amenities of a property. In return, landlords and associations will take on a greater share of the risk.

By relying on occupants to identify short-term lessees, landlords and condominium associations limit their exposure to potential claims of discrimination, which they would assume if they choose to screen potential...

Home-Sharing for Apartment Buildings and Condominiums

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