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Apps like AirBnB and Swimply Are Risky for Homeowners

Updated: Aug 29, 2022

Young boy in red swim suit and blue goggles doing a cannonball into pool - what could go wrong?

With talk of a pending recession growing each day, many homeowners may be looking for ways to supplement their income through programs like Swimply (pool rental), Airbnb (room rental), Neighbor (storage space rental like an attic, basement, or garage), or even Sniffspot (turning your yard into a dog park).

So if you are wondering, "Should I rent out my pool or garage?" the answer is - probably not. Letting someone else use your property for pay may sound like a good idea, but many insurance experts advise against it. Here's why.

Business Exclusion

Simply put, Mutual Assurance members and many other insurance provider policies do not cover accidents or losses incurred from renting rooms, pools, yards, or storage space. Why? Because liability for business operations is excluded. Whether a “full-fledged” or “incidental” business, renting out any part of your covered property would disqualify you from coverage.

Other Reasons:

  • Providing one of these services could mean cancellation of your policy.

  • Another consideration is what is called Strict or Absolute Liability. This refers to the legal responsibility for damages or injury, even if the homeowner found strictly/absolutely liable is not at fault or negligent. In other words, if a claim is made because of something that happened by a pool/storage/yard/room renter, the homeowner may not be able to argue in court that he is not negligent.

  • If a homeowner loses coverage or cannot afford it because their current provider has increased the rates following an incident, insurance with another provider will be much more expensive. Not only because Mutual Assurance offers the lowest long-term rates but because homeowners are legally required to disclose any losses when applying for a new policy.

If a homeowner doesn’t disclose a prior loss, they will be found out. Most insurance companies use a central database to report their losses, so if a homeowner does not provide the correct information on an application, that can be considered material misrepresentation and void the policy.

But I have an Umbrell