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Rental Insurance: Options for Covering Your Car, Home, or RV

One of the hottest new trends right now is the side-hustle. Dictionary.com defines this as the means of making money alongside one’s main form of employment or income. We could all use the extra cash right? But before you sign on to start renting out your car, home, or RV as a side-hustle, you will want to consider your rental insurance options first.

The rental industry has rapidly evolved over the past few years. Companies like Turo, Airbnb, VRBO, and Outdoorsy changed the name of the game. This evolution presented insurance carriers with new challenges and scenarios to consider. Unfortunately, the changes came along with some liability gray areas, too.

All too often, renting out your personal property creates a gap in your insurance coverage. Whether you want to rent out your car, home, or RV, the single best thing you can do to protect yourself is talk to your insurance agent before you begin.

But to give you a better idea of where these gray areas exist and how to prevent coverage gaps, we will break it down.

For the TL;DR visual version of this post, click here.

For Rent: Cars

Turo came about in 2010 and has since become the world’s largest car sharing marketplace. If your idea of a side-hustle is renting out your car to others, there are some financial aspects to consider first.

We covered becoming a ride share host in a prior blog post, but here is how ride share insurance works using Turo as an example.

When you sign on to become a ride share host, you’re allowing an outside party to drive your vehicle in exchange for a fee. Because this is outside of the standard use of your vehicle, your personal auto insurance policy is likely to be voided while on a rental trip. Keep in mind, you will still need to carry a personal auto policy for when you hop back into the driver’s seat. What makes this a catch-22 is that as of right now, very few (if any) insurance carriers will offer coverage.

Because your personal policy will likely be voided while your car is rented out, Turo does offer each host a variety of insurance options. It’s a clever system that deducts a percentage of your rental fee based on the level of coverage that you choose.

Alternatively, you may be able to take out a commercial policy for your vehicle and waive Turo’s plans. Keep in mind though, that a commercial policy for renting out your car can be expensive and difficult to find.

If renting out your home is more to your taste, there are a few things to think about.

Rental Insurance for Home Hosting

First and foremost, renting out your home in any capacity is going to go beyond what a standard homeowners insurance policy covers. Be sure to do your homework before you start listing your home as a rental. No pun intended.

A few factors to consider:

  • Are you renting out your primary home or a rental property?
  • Will your rental be short-term or long-term?
  • Are you going through a site like Airbnb or VRBO?

Where a long-term rental property may require a commercial or personal rental property insurance policy, a short-term rental of your primary home listed on Airbnb may be an ideal scenario for something like Erie’s home sharing endorsement. This is designed for those who are renting their homes fewer than 180 consecutive days per year. It’s also an affordable option.

It’s important to understand that a company like Airbnb does offer some protection. They call it their “AirCover” protection program. It includes $1 million in liability insurance and $3 million in damage protection. However, while this coverage is free, it has its limits. One major exclusion is a loss incurred due to acts of nature (think earthquakes and hurricanes).

Set yourself up for hosting success by reviewing your insurance options before you list your rental. Having the right insurance plan in place will help limit any negative financial impact. After all, you’re in this to make money, right?

But what if your home has wheels? Next, we’ll discuss rental insurance for your RV.

RVs and Rental Insurance

Rental Insurance for RVs

If you’re considering renting out your RV for others to experience the great outdoors, your ducks must be in a row first.

It’s easy enough to go to a site like Outdoorsy.com and list your RV for rent. The company even offers owners what they call “Protection Packages“. However, this is where things start to turn gray.

Protection Packages offer various levels of protection, but on a secondary basis. In other words, your primary insurance carrier would apply first in the event of a claim. The issue is, there are a lot of primary insurance carriers who do not permit RV rentals. If this is the case but you decide to rent out your RV anyway, any potential claims could be outright denied. That’s no good for anyone involved.

However, a company like Progressive may give you the option for coverage only when your RV is not being rented out. This may ideally work in-line with Outdoorsy’s Protection Packages, which state that if there is no other policy in place, their coverage would act as a primary policy.

As you can see, things tend to get murky pretty quickly. If renting out your RV is a priority, working with an insurance agent can help. Independent agencies work with multiple insurance carriers and can shop for a policy that works for your unique situation.

The Most Important Bit

Side-hustles appear to be the bee’s knees, but might sting you if you’re not considering all of the costs involved. Before you start renting out your car, home, or RV, the single best thing you can do to protect yourself is talk to your insurance agent.  You’re considering this type of side-gig because of the extra income.  But before you start, the first thing you should do is make sure you are protected financially.

If you are ready to take the next step and discuss your rental insurance options, our agents can help.

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