Renting Out Your Home? Here’s What You Need to Know About Liability and Insurance

Short-Term vs. Long-Term Rentals: Know the Difference

• Short-term rentals (like those listed on platforms such as Airbnb or Vrbo) often involve higher guest turnover, which can mean more wear and tear on your home—and potentially greater liability exposure.

• Long-term rentals typically involve more stable tenants, but come with their own set of legal and insurance implications.

No matter the length of stay, here are some best practices to help you manage the risks and enjoy peace of mind.

Tips for Safely Renting Out Your Home

1. Research Local Laws and Regulations
   Before listing your home, check with your city or county to understand local ordinances related to rental properties. Some areas have restrictions on short-term rentals, licensing requirements, or zoning limitations. It’s also wise to consult a legal professional to ensure your rental plans comply with applicable laws and avoid potential fines or legal issues.

2. Screen Your Renters
   Always request references, especially for long-term renters. For short-term guests, use reputable rental platforms that offer background checks or host protections.

3. Use a Clear Rental Agreement
   Create a written rental agreement outlining the terms of the stay, including:

   • Rent and payment details

   • Security deposit terms

   • Occupancy limits

   • Rules and restrictions (e.g., pets, smoking, noise)

   • Liability and maintenance responsibilities

1. Require a Security Deposit
   A security deposit provides a financial cushion for any damages caused during the rental period. Research to understand laws governing how security deposits must be handled, and be clear about what’s refundable and under what conditions.

2. Consider a Property Manager
   If you’re away for an extended period, hiring a property manager can provide on-the-ground support. They can respond to issues quickly and ensure the property remains in good condition.

3. Protect Your Personal Belongings
   Store valuable or sentimental items in a secure, locked area of your home. Alternatively, consider removing them entirely while the property is being rented.

4. Document Your Home’s Condition
   Take date-stamped photos or videos of all rooms and furnishings before tenants move in. This serves as documentation in case you need to file a claim for damage later.

5. Manage Your Mail
   Have your mail forwarded or held by the postal service while you’re away to prevent renters from handling sensitive information or packages.

6. Stay Accessible
   Provide your contact details to both your renters and a trusted neighbor in case of emergencies or questions during the rental period.

Insurance Matters: What You Should Know

Renting your home, whether occasionally or regularly, can affect your homeowners insurance. Here’s what to consider:

• Short-term rentals are often considered a business activity. Many standard homeowners policies don’t cover business-related claims. You may need additional coverage or a separate policy for short-term rental use.
• Long-term rentals usually require a landlord or rental dwelling policy, which offers different protection than a standard homeowners policy.

Before listing your property, contact your insurance agent to discuss:

• Whether your current policy covers rental activities
• The type of policy you need based on the length and frequency of rentals
• Liability protection in case a guest is injured on your property
• Coverage for damage caused by tenants or guests

We’re Here to Help

Renting out your home can be a smart way to generate income, but it’s not without risk. With thoughtful preparation and the right insurance protection in place, you can rent confidently—knowing you’ve taken steps to protect both your property and your peace of mind.

Have questions about how renting your home affects your insurance? We’re here to help! Contact us to review your current policy and explore the best coverage options for your unique situation.