Thursday, September 29, 2016

Would you want to Share Your Home with a Burglar?

According to the police, there is a new trend in Bay Area crime – theft by home sharing “guests.” A case in point is that of a man who recently rented a Mountain View home on a home sharing site. He canceled just before he was due to occupy the premises. The premises was burglarized shortly afterwards. A few days later the homeowner called the police to say that someone had opened a credit account in his name and was due to pick up an expensive mobile phone. The police caught the man at the store and arrested him. A large number of items stolen from the home were found in his car.

Consequently, if you intend renting your home to vacation renters, please be cautious. Use the tips given below to keep your property safe.

How To Minimize The Risk:
  • A mention in a posting that a room or closet will remain locked is an indication that items of value may be in the home. If this is to be done, do not mention it in the post but discuss it with the renters one-on-one before renting the premises.
  • Do not leave valuables or important documents in the home, while it is being rented out. If taking them with you is not possible, lock them in a safe that is secured to the floor.
  • If possible try to meet the renters in person. This allows you to evaluate the kind of people they are. Meet them in a coffee shop or other place where their faces will be captured on surveillance video. If the renters cannot meet you in person and do not have a convincing reason for not doing so, that could be a sign that they have something to hide and are not the kind of people you want in your home.
  • If they do meet you in person but their statements are vague or inconsistent, they may not be people you can trust. Also, ask for identification and take a photo of the document.
  • If your premises is too large for the number of people who the renters say will be staying there, it could be an indication of an ulterior motive.
  • Thieves shy away from surveillance cameras. If you have cameras in your home and the renters object to it, they may have something to hide.
  • Be careful of last minute urgent rentals. This is a ploy of robbers who hope that in the rush the homeowners will overlook the precautions they should take.
  • Be suspicious of last minute cancellation, as in the story at the beginning of this blog.
  • Trust your instincts. If you feel that a renter is not to be trusted, do not give your home to him.
If you are planning on renting out your house or apartment on a home sharing site, following the advice given by the police is not enough. You need to be adequately insured to protect you from any loss that may occur. Contact your insurance agent to discuss the coverage options available to you. There is a lot that can be done, often at a reasonable cost, to provide you with the protection you need.

Thursday, September 15, 2016

Home Sharing – The Insurance Gaps

The 2 leading home sharing apps today cover over 3 million rental listings in almost 200 countries. This is a far larger number of rooms than even the largest of hotel chains has. The growth is projected to increase over the coming years. While the homeowners benefit from the income, many of them do not think about the insurance, tax and regulatory issues involved in engaging in this kind of commercial activity. Insurance is the trickiest of these.

Homeowners Insurance Is Not Enough

In general, home insurance offers a fairly broad coverage. However, when a part of the home is being rented out to generate income, it becomes a commercial activity and this may not be covered by the policy. When a business operates from a home, the insurance company can refuse to accept a claim and may also suspend liability and property coverage either at the time of renewal or even during the policy period itself.

If that happens, there will be no protection if a guest steals from the home. Even worse, there will be no coverage if the guest causes major damage to the property or if the guest is injured while staying in the home. The homeowner will be unprotected.

There Is Coverage Available

A Landlord Policy is one option. But that is really meant for those who rent out the complete premises full time and do not themselves live there. The scope of the coverage and the cost makes this an unattractive option for those who share their homes.

Insurers are aware of the need for new types of coverage to serve the growing home sharing market. That is why many of the major insurance companies are developing policies and / or endorsements that are aimed specifically for those involved in the home sharing business. The coverage includes issues such as:
  • Expenses related to furniture damage or theft by a guest
  • Other structures on the premises like a converted garage apartment
  • Theft of personal property
  • Damage to landscaping caused by a guest
  • Liability coverage for small watercraft like canoes, kayaks, jet skis etc.
  • Alcohol liability
  • Loss of business income – broken pipes or property damage that may make the premises un-rentable
  • And more
In some cases a home sharing insurance policy can replace a normal homeowner’s policy. The issues is such a serious one that one of the major home sharing apps requires that homeowners must have adequate insurance coverage before signing up.

If you are involved in home sharing or plan to do so, it is critical that you have insurance that will give you the protection you need. Contact your insurance broker to discuss the nature of your home sharing activities and the coverage options available to you. He will be able to guide you to the right type of coverage that is cost effective while also providing you with the protection you and your home need.