Justin Kraus, Personal Lines Manager, explains the growing risks of renting out your home or apartment for short-term rentals using services like Airbnb.
With living cost going up each year, homeowners have been looking for additional sources of income. One recent option has been Air BnB, which allows the homeowner to temporarily rent out their home, condo or coop as a bed and breakfast. However, there are many risks involved with this type of rental.
NYC has made it illegal for people to list entire apartments for periods less than 30 days. This new law will impose fines of up to $7,500 for violating it. Another important issue is with your home insurance policy.
A typical home insurance policy specifically excludes short term rentals and could deny a claim if this is found during the adjusting process. Turning your home into an income producing property is not a bad idea as long as you carry the correct insurance.
Your home is often one of your biggest investments, it is important to make sure it is covered adequately. Misrepresentation or fraud is one of the leading causes for claim denial, so make sure that you inform your insurance agent of all possible exposures when you first obtain your insurance policy or as things change.
For more information, please contact us.