Does Our Sharing Economy Create New Risks?

It seems that in today’s world, we are using sharing our homes and cars with total strangers. The questions that need to be asked are; does this create new risks, and how do I make sure there is proper insurance place.

Many people are using online platforms or other home renting sites to rent out home or find vacating spots. While this may be a great way to find a vacation rental or rent out your home, it could pose issues if you rent out your primary home, condominium, or apartment to others for a fee. It may be wise to read through this, and a related article, before you rent out your primary residence.

1. Your homeowner’s, renter’s or condominium insurance most likely will not provide coverage if you rent out your residence. So, if the renter damages your property or burns your home down, you will be uninsured under your homeowner’s policy.
2. The rental sites say they offer some level of insurance, but it is usually secondary to your policy, and most likely will not respond.
3. Read your leas, community standards, or rental agreement; many of these prohibit sub-leasing.
4. It may actually be illegal in your city to rent out your residence on a short term basis. Check the zoning laws in your community. If you live in an area with a community association, there may also be regulations to consider.
5. By placing pictures of your primary home online you may open yourself up to loss of privacy.
6. Finding the right tenant is crucial to a positive landlord experience, so be sure to screen potential renters carefully. You need to verify employment and income for potential renters, as well as check their credit history, call their former landlords, and have a face to face meeting with them to make sure you are allowing the right people to move in to your home

One final thought, you could also create increased liability if the renter somehow damages your neighbor’s property or injures a third party on your property.