Introduction

Definitions

Property coverages

Perils insured against

Exclusions

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Introduction

 There are many issues involved with sharing one's home. Determining who to allow to stay in one's house is important; Airbnb has a verification process that requires a potential guest to provide a photo of a government issued ID such as passport or driver's license, connect another online profile such as Facebook to the Airbnb account, or take a selfie and answer some questions that only you would know. Airbnb may check public records for criminal convictions or sex offender lists if they have enough information, but it is not any sort of guarantee that interactions are safe or problem free. In February 2016 guests in Paris discovered a decomposing body in the backyard of a home they rented through Airbnb.

 Damage to premises, injury to guests, and theft of property of either the host or the guest are all issues in renting one's home to others. Insurance is designed to protect the homeowner and residents living with her, and occasional guests the homeowner knows. However, letting a friend stay for a few days or a week on vacation is different than letting total strangers rent the house while you are away or rent a room while you are there.

 If the insured rents the property enough he can earn enough to make it a business by definition, and end up excluding coverage. Under liability coverage, rental of the insured location on an occasional basis as a residence is allowed, but if the insured is regularly home-sharing, it can rapidly get confusing as to whether or not there is coverage.

 Property of roomers, boarders, and other tenants is excluded unless related to an insured, and those renting from a home-sharing organization are not relatives. Because of these issues ISO has developed a number of endorsements to clarify what is and is not covered under the policy. The endorsements are numbered to match the forms they attach to: HO 06 52 attaches to the HO 00 02, HO 06 53 attaches to HO 00 03, and so forth. The endorsements vary mildly based on the form they attach to, otherwise they are identical.

 Definitions

 A. The following definitions are added:

1. "Home-sharing host activities" means:

a. The:

(1) Rental or holding for rental; or

(2) Mutual exchange of services;

of the "residence premises", in whole or in part, by an "insured" to a "home-sharing occupant" through the use of a "home-sharing network platform"; and

b. Any other related property or services made available by an "insured" for use during such:

(1) Rental; or

(2) Mutual exchange of services;

except those property or services provided by another party.

2. "Home-sharing network platform" means an online-enabled application, web site or digital network that:

a. Is used for the purpose of facilitating, for money, mutual exchange of services or other compensation, the rental of a dwelling or other structure, in whole or in part; and

b. Allows for the agreement and compensation with respect to such rental to be transacted through such online-enabled application, web site or digital network.

3. "Home-sharing occupant" means a person, other than an "insured", who:

a. Has entered into an agreement or arranged compensation with an "insured" through the use of a "home-sharing network platform" for "home-sharing host activities"; or

b. Is accompanying or staying with a person described in Paragraph 3.a. of this provision under such "home-sharing host activities".

B. Definition B.3. "Business" is replaced by the following:

3. "Business" means:

a. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis;

b. "Home-sharing host activities"; or

c. Any other activity engaged in for money or other compensation, except the following:

(1) One or more activities, not described in (2) through (4) below, for which no "insured" receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period;

(2) Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity;

(3) Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or

(4) The rendering of home day care services to a relative of an "insured".

C. In this Policy, the terms:

1. Roomer;

2. Boarder;

3. Tenant; or

4. Guest;

do not include a "home-sharing occupant".

 Analysis

 The endorsement begins by defining key words relevant to home-sharing. The first is "home-sharing host activities," which is the rental, holding for rental, or mutual exchange of services of the residence premises by an insured to a home-sharing occupant through the use of a platform designed to allow such transactions. Related property or services made available by an insured for use during such rental or exchange of services are also included in the definition of "home-sharing host activities." If the hosts stock the refrigerator with food and snacks before the guests get there, provides breakfast every morning, or does laundry for the guests, those other services are part of the host activities.

 A "home-sharing network platform" in the online-enabled application, digital network, or website that facilitates the transaction between parties for the host to put his premises up for rental in exchange for payment. The platform accepts and transfers payment to the hosts and allows hosts and guests to find each other and arrange for the rental.

 "Home-sharing occupant" is someone other than an insured who has entered into an agreement or arranged through a platform to rent the premises of an insured. It also includes someone accompanying the occupant under the home-sharing agreement. Ralph may make arrangements to rent a home over Valentine's weekend to propose to his girlfriend; she is considered a home-sharing occupant as well. Likewise, if Mom arranges a vacation for the family, everyone in the family is considered a home-sharing occupant.

 The definition of "business" needs to be changed because depending on frequency of rentals, a host could readily fall into becoming a business. "Home-sharing host activities" are added into the definition of "business" with trades, professions, or occupations engaged in on a full-time, part-time, or occasional basis. The rest of the definition of "business" is the same, with volunteer activities, day care for mutual exchange of services, and day care for relatives not being considered a business. The inclusion of host activities as a business is important because this will be impacted by liability coverage.

 The form also states that the terms "roomer," "boarder," "tenant," or "guest" do not include a home-sharing occupant. There are particular coverages or exclusions for roomers, boarders, tenants, or guests, and home-sharing occupants receive different coverage based on this endorsement. For clarity the different types of visitors need to be distinguished.

 Property Coverages

 SECTION I – PROPERTY COVERAGES

C. Coverage C – Personal Property Paragraphs f. and g. of 4. Property Not Covered are replaced by the following:

We do not cover:

f. Property of:

(1) A "home-sharing occupant";

(2) Any other person occupying the "residence premises" as a result of any "home-sharing host activities"; and

(3) Roomers, boarders and other tenants, except property of roomers and boarders related to an "insured";

g. Property in:

(1) A space while rented or primarily held for rental to a "home-sharing occupant"; or

(2) Subject to Paragraph C.4.g.(1), property in an apartment regularly rented or held for rental to others by an "insured" except as provided in E.10. Landlord's Furnishings under Section I – Property Coverages;

The following provision is added to 4. Property Not Covered:

We do not cover property used primarily for "home-sharing host activities".

D. Coverage D – Loss Of Use

Paragraph D.2. Fair Rental Value is replaced by the following:

2. Fair Rental Value

If a loss covered under Section I makes that part of the "residence premises" rented to others or held for rental by you not fit to live in, we cover the fair rental value of such premises less any expenses that do not continue while it is not fit to live in.

However, we do not cover any fair rental value arising out of or in connection with "home-sharing host activities".

Payment will be for the shortest time required to repair or replace such premises.

 Analysis

 The form goes on to exclude property of home-sharing occupants or anyone else occupying the premises as a result of any host activities by the insured. Likewise property of an occupant in a space the insured uses to rent to home-sharing occupants is excluded as well. An exception is made for landlord's furnishings as per the usual landlord's coverage. However property primarily used for home-sharing activities is excluded.

 Fair rental coverage is also excluded for fair rental issues arising out of or in connection with the home-sharing of the property. If the insured sustains a loss to the dwelling and had agreed to rent it to a home-sharer for the week following the loss but had to cancel due to the loss, there is no fair rental value compensation.

 Perils Insured Against

 SECTION I – PERILS INSURED AGAINST

Paragraph 8. is replaced by the following:

8. Vandalism Or Malicious Mischief

This peril does not include loss to property on the "residence premises", and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if:

a. The loss arises out of or results from "home-sharing host activities"; or

b. The dwelling has been vacant for more than 60 consecutive days immediately before the loss.

A dwelling being constructed is not considered vacant.

Paragraph 9. is replaced by the following:

9. Theft

a. This peril includes attempted theft and loss of property from a known place when it is likely that the property has been stolen.

b. This peril does not include loss caused by theft:

(1) Committed by an "insured";

(2) In or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied;

(3) From that part of a "residence premises" rented by an "insured" to someone other than another "insured";

(4) That occurs off the "residence premises" of:

(a) Trailers, semitrailers and campers;

(b) Watercraft of all types, and their furnishings, equipment and outboard engines or motors; or

(c) Property while at any other residence owned by, rented to, or occupied by an "insured", except while an "insured" is temporarily living there. Property of an "insured" who is a student is covered while at the residence the student occupies to attend school as long as the student has been there at any time during the 90 days immediately before the loss; or

(5) If such loss arises out of or results from "home-sharing host activities".

 Analysis

 Under perils insured against, changes are such that vandalism or mischief caused by a home-sharing occupant or as a result of any home-sharing activities are excluded. The peril of theft is modified so that theft that arises out of any host activities is also excluded.

 Exclusions

 SECTION II – EXCLUSIONS

Exclusion E.2. is replaced by the following:

Coverages E and F do not apply to the following:

2. "Business"

a. "Bodily injury" or "property damage" arising out of or in connection with a "business" conducted from an "insured location" or engaged in by an "insured", whether or not the "business" is owned or operated by an "insured" or employs an "insured".

This Exclusion E.2. applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the "business".

b. With respect to other than "home-sharing host activities", this Exclusion E.2. does not apply to:

(1) The rental or holding for rental of an "insured location":

(a) On an occasional basis if used only as a residence;

(b) In part for use only as a residence, unless a single-family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or

(c) In part, as an office, school, studio or private garage; and

(2) An "insured" under the age of 21 years involved in a part-time or occasional, self-employed "business" with no employees;

G. Coverage F – Medical Payments To Others Exclusion G.4. is replaced by the following:

Coverage F does not apply to "bodily injury":

4. To:

a. A "home-sharing occupant"; or

b. Any person, other than a "residence employee" of an "insured", regularly residing on any part of the "insured location".

The following provision is added:

Personal Injury Coverage

If the Personal Injury Coverage endorsement is made a part of this Policy, Exclusion 1.g. is replaced by the following:

This insurance does not apply to:

1. "Personal injury":

g. Arising out of or in connection with a "business" conducted from an "insured location" or engaged in by an "insured", whether or not the "business" is owned or operated by an "insured" or employs an "insured". This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the "business".

With respect to other than "home-sharing host activities", this exclusion does not apply to:

(1) The rental or holding for rental of an "insured location":

(a) On an occasional basis if used only as a residence;

(b) In part for use only as a residence,

unless a single-family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or

(c) In part, as an office, school, studio or private garage; and

(2) An "insured" under the age of 21 years involved in a part-time or occasional, self-employed "business" with no employees;

All other provisions of this Policy apply.

 Analysis

 Under exclusions, the exception to the exclusion for the occasional renting of the home as a dwelling is removed when the rental is tied to host activities. "Host activities" are defined as a business, and business use is excluded.

 Medical payments to others does not apply to home-sharing occupants nor does personal injury coverage if it is on this policy. Under personal, the occasional rental is allowed, but host activity is still excluded.