If you plan to rent out your home, you should check that you have certainty of coverage to protect yourself and the property. Homeowners policies are not intended to cover business or commercial use of your home, which includes renting it out for a few nights. This requires extra coverage, either in a separate policy designed to protect your house when rented, or an endorsement added to your existing policy.
You need your own insurance protection, even if the service you use to rent out your home promotes backup coverage for anyone using its service. Typically, these policies will not reimburse for more than the actual cash value of property damaged by guests. For example, the policies will not pay for fire damage caused by electrical wiring. Additionally, covered property may exclude valuable items in your home, such as jewelry or artwork. Generally, liability coverage offered by these companies is limited to injury or damage caused by guests, not liability caused by you or your family.
Before you rent out your house, make sure you comply with applicable New Jersey state and local laws. New Jersey allows for short-term rentals, but the state imposes an additional tax on any property advertised on mass-market online platforms. Also, you should check whether the rental service remits these taxes to the state directly to save yourself time during tax season. Some municipalities—particularly those with easy access to New York City—have imposed local restrictions on short-term rentals for fewer than 30 days.
If you choose to rent a house or apartment for your upcoming travels, be aware that most homeowner policies cover your property and liability when you are traveling. However, other people’s property that’s in your care at the time of the loss is covered only for fire, smoke and explosion. Some of the property you own and take with you may need a floater policy to provide optimum protection. Additionally, travel insurance can protect you from cancellations or health care expenses while traveling.
Want to rent your property out for travelers? Are you a traveler? Give our office a call today to make sure you are covered.
