Wednesday, July 29, 2015

Homesharing Liability Insurance – A Necessity

The concept of home sharing grew out of necessity, when:
  • High-profile sporting events such as the Olympics, Wimbledon, US Open, French Open, Australian Open, F1 tournaments, Grand Prix, Tour De France etc, brought thousands of fans to a city or town, where the event was hostedand there were not enough hotels or resorts to accommodate all of them Homestays emergedas a more cost-effective option for tourists than typical hotels or motels
  • The proliferation of Universities, Colleges and B-Schools, and the need to accommodate a large number of students, created a gap
  • Home-owners, who sought to rent out a room or a portion of their home,to augment their income, stepped in
The concept and popularity of homesharing opened up a market, invitingattention and investment.A new breed of service providers capitalized on the trend, bringing home-owners seeking a renter and renters together,and managing the relationship as an intermediary. Prominent among these are AirBnB, HomeAway and VRBO. These ‘accommodation sharing websites’ have helped innumerable home-owners find short-term renters and havecreated an additional income for themselves.

However, opportunity breeds risks. There have been several cases of home owners experiencing theft, extortion, assault, or property damage (accidental fire or flooding, in the home) at the hands of their homeshare renters. To help home owners to protect themselves against damage and litigation, Insurance companies offer a ‘Homesharing Liability Insurance’.

A typical Homeowners Insurance Policy, covers liabilities for bodily harm experienced by guests at your home. It does not cover a commercial or business opportunity, which most homesharing arrangements are. An exclusive HomesharingLiability Insurance policy provides higher and better coverage in instances when the rented area (or the entire home) has been destroyed by fire, accidentalflooding or acts of vandalism.

Coverage and Cost

Most Homesharing Liability Insurance policies work in tandem with Homeowners’ Insurance Policies and extend the scope,to cover:
  • Lawsuits from a guest for bodily injury (example: your homeshare renter slips on the floor and falls, injuring themselves)
  • Lawsuits from a guest for property damage (example: your homeshare renter’s TV is damaged due to huge electrical spikes causedby improper earthling
  • Loss of income as a result of damage caused to your home by your guest (example: your guest accidentally sets a fire that engulfs the rented area and portions of your home)
Typical Homesharing Liability Insurance policies offer
  • Up to USD 1 million in Commercial General Liability insurance for bodily injury or property damage incurred by the homeshare renter
  • Reimbursement up to USD 5,000 for 90 days of lost rental income in case your rental property is severely damaged by the actions of your guest; and when the damage exceeds $10,000
Homesharing Insurance Policies are very cost-effective with premiums starting at USD 36 per month. There are options to pay in advance for the entire year, or every month,to suit your convenience.

Home-owners and Umbrella Liability Insurance policies do not provide cover when the homesharing arrangement is intended to generate income. In the absence of an exclusive Liability Insurance, you can be at risk from the actions of your homeshare renter.

Reduce these risks, reach out to an insurance company that has the expertise to guide you and help you with getting the right cover under the Homesharing Liability Insurance policy.

Tuesday, July 14, 2015

Renter’s Insurance - Protects Your Assets

It is true that renters too, have a natural tendency to accumulate personal possessions, which have emotional / monetary value. Consequently, it behooves that these assets be protected against damage or theft. The “Renter’s Insurance Policy” provides coverage, protecting your valuable goods against any mishaps and provides you with a means, to replace your damaged or lost property.

What Protection does a Renter’s Policy Provide? 

Homeowner’s policy does not cover your damages

A homeowner’s policy subscribed by your landlord only covers the external structure of the rented space including the walls, beams, columns, doors and windows. It does not provide coverage for your personal possessions or even the equipment provided by your landlord such as refrigerators, stoves, heaters, etc.

Your Prized Possessions

An inventory of your prized possessions will reveal that the total value of the goods, is monetarily more than you thought they could be. Consequently, not insuring your possessions and then having to replace them, in the event of a mishap, could prove to be extremely expensive. Insuring your assets, helps mitigate any unfortunate consequences. 

Renter’s Insurance covers many mishaps

In addition to loss due to theft, renter’s insurance also covers mishaps due to fire, vandalism, electrical short circuit, lightning strike, vehicle crash, heavy wind and hurricanes,  as the latter two, can wreck your belongings and offset your finances for some time. However, earthquakes, floods and landslides are covered by exclusive policies. 

Renter’s Insurance goes beyond just your personal belongings

Renters Insurance is quite broad and covers important situations.

a. Renter’s liability: If there is damage to another renter’s property (or even your landlord’s property) because of your negligence, you are liable to pay for damages to their property. For example, water seeps from your bathroom into the home below, and it damages the walls. You are liable to pay for those damages, which are covered by the Renter’s Insurance.

b. Personal Liability: If somebody incurs bodily harm or property damage due to you or your pet(s), you are liable to pay for their medical expenses. Example: your pet dog bites your landlord, or a visitor slips and falls in your home.

c. Loss of Use: If your rental space is rendered unusable by a mishap such as a fire, you will be forced to look for temporary accommodation, elsewhere In such a scenario, you will be covered for additional living expenses incurred during this period, such as hotel or temporary rental bills, meals, laundry etc.

d. Car Interiors: This covers all those possessions that were inside your car when it was .damaged. This includes books, CDs, stereo or sound systems, onboard computers, etc, which are not covered by typical auto policies. 

Renter’s Insurance is not expensive

By paying a few hundred dollars of premium every year, you can cover all your personal belongings.

What is covered?
  • Furniture
  • Clothes
  • Electronic equipment like desktop and laptop computers, mobile phones, kitchen appliances, sound systems, CD/DVD players, gaming consoles, etc
  • Kitchen utensils
  • Jewelry and Watches
  • Modern and Antique artifacts
  • Sports and Fitness Equipment
Policy Types
  • Actual Cash Value: The insurer factors depreciation while evaluating damages to your goods and willsettle claims as per the present market value of those goods. Accordingly, premiums are low.
  • Total Replacement Value: Depreciation is not factored and the original price of the goods at which they were procured will be settled in case of a claim. Accordingly, premiums are high.
Reach out to an insurance broker or company to help guide you through the complex terms and conditions and the very fine print. Use their guidance to ensure that you have the right coverage.