Property coverages

Additional coverages

Perils insured against

Conditions

Section II exclusions

Section II additional coverages

Section II conditions

Sections I and II conditions

Introduction

As mentioned in the article on the home-sharing exclusion HO 06 53 02 17, there are many issues involved with sharing one's home. Deciding who to allow to stay, what services to provide, potential 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. Friends and relatives who visit are different from strangers paying in order to stay at the premises, and they are different from tenants, roomers, or boarders. 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 62 09 22 attaches to the HO 00 02, HO 06 63 09 22 attaches to HO 00 03, HO 06 64 09 22 to the HO 00 04, HO 06 65 09 22 to the HO 00 05, HO 06 66 09 22 to the HO 00 05, and HO 06 68 09 22 to the HO 00 08. The endorsements vary slightly based on the form they attach to; otherwise, they are identical. Many parts of this form are identical to the exclusion HO 00 06 53; the explanations are repeated here for the reader's ease.

Definitions from the HO 00 03

These definitions were originally included in the 2017 versions of the home-sharing endorsements but were removed in 2022, as these definitions are now a part of the base homeowners policies. The dollar amounts included in the definitions and other parts of the policies have also been updated. The following definitions are quoted from the homeowners policies but included here for easier reference.

6. "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.

7 ."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.

8. "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 8.a. of this provision under such "home-sharing host activities".

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"; c. The leasing of the mineral rights of an "insured location"; or d. 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 $5,000 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 first definition 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 mutual exchange of services are also included in the definition of "home-sharing host activities." If the host stocks 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. The policy specifies that the property or services provided by another party are not included.

A "home-sharing network platform" is 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. Some popular examples are Airbnb, VRBO, and Flipkey.

"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" needed to be changed because depending on the 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 HO 06 63

SECTION I – PROPERTY COVERAGES

Coverage B – Other Structures With respect to the coverage provided by this endorsement, Paragraphs B.2.b. and B.2.c. are replaced by the following:

2. We do not cover:

b.Other structures rented or held for rental to any person other than a:

(1) "Home-sharing occupant"; or (2) Tenant of the dwelling; unless used solely as a private garage;

c. Other structures from which any "business" is conducted, except structures used primarily for "home-sharing host activities"; or

C. Coverage C – Personal Property With respect to the coverage provided by this endorsement: Paragraph 4.g. Is replaced by the following:

g. Property in an apartment regularly rented or held for rental to others by an "insured", except as provided in E.9. Landlord's Furnishings under Section I – Property Coverages;

Paragraph 4.h. does not apply.

D. Coverage D – Loss Of Use With respect to the coverage provided by this endorsement, Paragraph D.2. Fair Rental Value is replaced by the following:

2. Lost Rental Value Of Home-sharing Host Activities If an "insured" has entered into a contract or agreement with another person through the use of a "home-sharing network platform" for "home-sharing host activities" for a specified period of time, and either:

a. A loss covered under Section I makes that part of the "residence premises" used for such "home-sharing host activities" not fit to live in during the period of time specified in such contract or agreement; or

b. The "insured" or such other person cancels such contract or agreement, provided such cancellation takes place:

(1) During the period of time a National Weather Service hurricane watch or hurricane warning is in effect for any part of the state in which the:

(a) "Residence premises" is located; or

(b) Person entering into such contract or agreement with the "insured" resides; or

(2) Within 24 hours of the termination of such hurricane watch or hurricane warning described in Paragraph b.(1) of this provision;

we cover the lost rental value of the "home-sharing host activities" specified under such contract or agreement, less any expenses that do not continue while it is not fit to live in. Payment will be for the shortest period of time agreed upon for "home-sharing host activities" under such contract or agreement.

Analysis

The rental of other structures to home-sharing occupants are not covered unless used solely as a garage, the same as for tenants in the homeowner policies. Also not covered are other structures from which any business is conducted, except structures used primarily for "home-sharing host activities." The form provides coverage for property in a space while rented to a home-sharing occupant, and property used primarily for home-sharing host activities by way of removing those exclusions from the applicable homeowners policy. For example, an insured rents a room via a home-sharing app. If the insured lets the renter put his car in the garage and the garage burns, there is still coverage for the garage. However, if the insured is using the garage for his woodworking business and the garage burns, then coverage is excluded as part of the "business" exclusion.

Lost rental value is covered in event of a covered loss to the property that makes it not fit to live in, or a contract or agreement is cancelled by either the insured or the home-sharing occupant during the period of time a hurricane watch or warning is in effect in the residence premises state or the state of the home-sharing occupant. Lost rental value is covered for the shortest period of time agreed upon for the home-sharing host activities under such a contract or agreement, less any expenses that do not continue while the property is not fit to live in.

Additional Coverages

E.Additional Coverages Paragraph E.9. Landlord's Furnishings is replaced by the following:

9. Landlord's Furnishings We will pay up to $3,000 for your appliances, carpeting and other household furnishings, in each apartment on the "residence premises" regularly rented or held for rental to others by an "insured", for loss caused by a Peril Insured Against in Coverage C, other than Theft.

This coverage includes, but is not limited to, loss to appliances, carpeting and other household furnishings which results from "home-sharing host activities".

This limit is the most we will pay in any one loss regardless of the number of appliances, carpeting or other household furnishings involved in the loss.

This coverage does not increase the limit of liability applying to the damaged property.

Analysis

Coverage is provided for landlord's furnishings as per the usual homeowners landlord's coverage, but the endorsement specifies that coverage includes loss to things like the insured's appliances, carpeting, and other household furnishings. Perils insured against are the same included in Coverage C, other than theft. The 2022 revision increased the limit from $2,500 to $3,000.

Perils Insured Against

SECTION I – PERILS INSURED AGAINST

A. Coverage A – Dwelling and Coverage B – Other Structures With respect to the coverage provided by this endorsement, Paragraphs 2.c.(3) and 2.c.(4) are replaced by the following:

(3) Theft in or to a dwelling under construction, or of materials and supplies to use in the construction until the dwelling is finished and occupied; (4) Vandalism and malicious mischief, and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed, remodeled, renovated or repaired is not considered vacant;

B. Coverage C – Personal Property With respect to the coverage provided by this endorsement, Paragraph 9.b.(3) is replaced by the following:9.Theftb.This peril does not include loss caused by theft:

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

(a) Another "insured"; or (b) A "home-sharing occupant". However, we will not pay, under this Provision b.(3)(b), for loss by theft of:

(i) Money, bank notes, bullion, gold, goldware, gold-plated ware, silver, silverware, silver-plated ware, pewterware, platinum, platinumware, platinum-plated ware, coins, medals, scrip, stored value cards and smart cards; (ii) Securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets and stamps regardless of the medium (such as paper or computer software) on which the material exists; or (iii) Jewelry, watches, furs, precious and semiprecious stones; Paragraphs 8. and 9.b.(5) do not apply.

Analysis

Form HO 06 63 09 22 provides coverage for loss to the dwelling or other structures caused by theft or vandalism that result due to "home-sharing host activities" by removing those exclusions from the base homeowners policy. Most of the other home-sharing endorsements do not provide Coverage A or Coverage B protection. However, all of the endorsements do provide coverage for theft or vandalism of personal property caused by another insured or a home-sharing occupant. Naturally, theft of money, bullion, gold, securities, accounts, deeds, jewelry, watches, furs, and the rest of the standard items in those categories is not covered.

Conditions

SECTION I – CONDITIONS With respect to the coverage provided by this endorsement, Paragraph G. Other Insurance And Service Agreement is replaced by the following:

G. Other Insurance And Service Agreement

1.If a loss covered by this Policy is also covered by:

a. Other insurance, except insurance provided by a "home-sharing network platform", we will pay only the proportion of the loss that the limit of liability that applies under this Policy bears to the total amount of insurance covering the loss; or b. A service agreement, protection plan or guarantee, except a service agreement, protection plan or guarantee provided by a "home-sharing network platform", this insurance is excess over any amounts payable under any such agreement.

2. Subject to Paragraph G.1., if, at the time of loss, there is:

 

a. Other insurance;

b. A service agreement;

c. A protection plan; or

d. A guarantee;

provided by, on behalf of, or through a "home-sharing network platform" covering the same property covered by this Policy, this insurance is primary with respect to the amount due under such other insurance, service agreement, protection plan or guarantee.

3. As used in this Paragraph G.:

a. A service agreement means a service plan, property restoration plan, home warranty or other similar service warranty agreement, even if it is characterized as insurance. b. A protection plan or guarantee means a product provided by a "home-sharing network platform" which provides property damage protection for "home-sharing host activities", even if it is characterized as insurance.

Analysis

The "Other Insurance and Service Agreement" section of the homeowners policy is amended to address the possibility of other coverage provided through the home-sharing platform. If such other coverage exists, whether it be other insurance, a service agreement, a protection plan, or a guarantee, this policy is primary over any coverage provided by the home-sharing platform. The form specifies that a protection plan or guarantee means a product provided by a "home-sharing network platform" which provides protection for property damage caused by "home-sharing host activities", even if the network provider calls the product insurance.

Section II Exclusions

SECTION II – EXCLUSIONS With respect to the coverage provided by this endorsement: Exclusion E.2. is replaced by 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.This Exclusion E.2. does not apply to:

(1) "Home-sharing host activities"; (2) With respect to other than "home-sharing host activities":

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

(i) On an occasional basis if used only as a residence; (ii) 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 (iii) In part, as an office, school, studio or private garage; and

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

Exclusion G.4. is replaced by the following:

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

Analysis

Under Section II Exclusions, businesses are excluded under the homeowners policy for bodily injury or property damage. This endorsement makes an exception to that exclusion for "home-sharing host activities". New with the 2022 edition, the exclusion of medical payments to others to a home-sharing occupant is removed, thus providing coverage. Coverage is made available if "home-sharing host activities" or other temporary rentals, lead to damage. The rentals are to be on an occasional basis if only used as a residence, or in part as a residence, or in part as an office, school, studio or private garage. Coverage is also provided for "insureds" under the age of 21 involved in a part-time, occasional, self-employed business with no employees. An insured's son or daughter that has a pet-sitting or lawn mowing service in the summer, for example.

Section II – Additional Coverages

SECTION II – ADDITIONAL COVERAGES With respect to the coverage provided by this endorsement, Paragraph C. Damage To Property Of Others is replaced by the following:

C. Home-sharing Host Activities Damage To Property Of Others

1. We will pay, at replacement cost, up to:

a. $5,000; or b. The Home-sharing Host Activities Damage To Property Of Others Limit Of Liability shown in the Schedule; whichever is greater, per "occurrence", for" property damage" to property of others:

a. Caused by an "insured"; and b. Arising out of "home-sharing host activities".

2. We will not pay for "property damage":

a. To the extent of any amount recoverable under Section I; b. Caused intentionally by an "insured" who is 13 years of age or older; c. To property owned by an "insured"; d. To property owned by or rented to a tenant of an "insured" or a resident in your household; or e. Arising out of:

(1) A "business", other than "home-sharing host activities", engaged in by an "insured"; (2) Any act or omission in connection with a premises owned, rented or controlled by an "insured", other than the "insured location"; or (3) The ownership, maintenance, occupancy, operation, use, loading or unloading of aircraft, hovercraft, watercraft or "motor vehicles". This Exclusion e.(3) does not apply to a "motor vehicle" that:

(a) Is designed for recreational use off public roads; (b) Is not owned by an "insured"; and (c) At the time of the "occurrence", is not required by law, or regulation issued by a government agency, to have been registered for it to be used on public roads or property.

Analysis

The standard Damage To Property Of Others section is modified so that the greater of $5,000 or the amount listed in the schedule for the Home-sharing Host Activities Damage To Property Of Others Limit of Liability is paid due to damage to property of others caused by an insured and arising out of home-sharing host activities. The 2022 revision increased the limit to $5,000 from the previous $1,000. Damage that results out of a business is excluded other than the home-sharing business; this endorsement is designed to provide coverage for those home-sharing exposures.

Section II – Conditions

SECTION II – CONDITIONS With respect to the coverage provided by this endorsement, Paragraph H. Other Insurance is replaced by the following:

H. Other Insurance

This insurance is:

1. Primary with respect to:

a. Other insurance; b. A protection plan; or c.A guarantee; provided by, on behalf of, or through a "home-sharing network platform" covering "home-sharing host activities".

2. Subject to Paragraph H.1., excess over other valid and collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply in this Policy. 3. As used in this Paragraph H., a protection plan or guarantee means a product provided by, on behalf of, or through a "home-sharing network platform" which provides liability protection for "home-sharing host activities", even if it is characterized as insurance.

Analysis

The other insurance condition mirrors the Section I condition relative to home-sharing. Again, this policy is primary over coverage provided by, or on behalf of, a home-sharing network platform for home-sharing host activities.

Sections I and II Conditions

SECTIONS I AND II – CONDITIONS

The following provision is added:

Home-sharing Host Activities Verification Requirements

With respect to "home-sharing host activities", we must be provided, as often as we reasonably require, with information concerning the number of:

1.Rental agreements or contracts entered into by an "insured"; and 2.Nights the "residence premises" was occupied, in whole or in part, by "home-sharing occupants".

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". This exclusion does not apply to:

(1) Home-sharing host activities"; (2) With respect to other than "home-sharing host activities":

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

(i) On an occasional basis if used only as a residence; (ii) 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 (iii) In part, as an office, school, studio or private garage; and

(b)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

The carrier can require the insured to provide it with agreements or contracts entered into for renting the premises and the number of nights the premises was occupied by home-sharing occupants, as often as the carrier reasonably requires. This allows the insurer to monitor the exposure and know how much the property is being rented instead of being used as an insured's residence.

If endorsements HO 24 82 Personal Injury Coverage or HO 24 10 Personal Injury Coverage (Aggregate Limit of Liability) are a part of the policy, personal injury coverage is provided in the policy–but those endorsements exclude personal injury arising out of a business, including home-sharing host activities. The home-sharing host activities endorsement provides coverage for that exposure by excepting "home-sharing host activities" from that exclusion. Includes copyrighted material of Insurance Services Office, Inc., with its permission.