I hope I can be of at least some assistance on this topic, as I'm an insurance agent here in California, and this an extremely HOT topic.
Similar to Uber and Lyft, Home Sharing is a new concept that insurance companies simply can't catch up to within their 75 page legal documents known as Insurance policies. For Ridesharing, you are declaring that at some point of owning your personal vehicle, you will press a button and become a Taxi. For Homesharing, at any given time, you go from a normal homeowner to a "hotel" of sorts. An older industry like Insurance (ESPECIALLY HERE IN CALIFORNIA) is having the toughest time with it, but other states are adopting it slowly.
I have written several Homesharing insurance policies through a specialty carrier here in California. However, and to my complete embarrassment, their rules suddenly changed. Their definition of "Short Term Rental Coverage" was pulled out from underneath me, and they threatened a policy holder after "needing confirmation that all short term rental periods are in excess of 1 week". For AirBNB, homeowners rent for as little as a single night, so this doesn't fly AT ALL. So I move to Plan C...
There are non-admitted carriers that exist in California. These carriers, referred to as "surplus" carriers, and will write any insurance policy, for any home, in any location, with any claims history, and any living scenario. Sounds awesome right??? I thought so too. In fact, I've assisted several clients in obtaning coverage in the middle of the forest, where not one single California carrier will say yes. The trouble, you're at the mercy of their pricing structure, and it IS NOT pretty.
Here's an example of a situation I'm in right now while trying to assist a client. Her current carrier has advised they are non-renewing her after she disclosed signing with a Vacation Rental management company (they post to all of the homesharing sites for you, assist with vetting tenants, processing payments, etc.). Her existing coverage was just shy of $1,500 annually. The surplus carrier returns a quote to me today, and I'm trying to figure out how on earth I'm going to make a phone call to advise her Home Insurance will be increasing to over $6,000 per year...if she decides to keep the AirBNB listing up.
A few large carriers (including the company I work for) are allowing HomeSharing coverage in other states. In fact, I have a dual license and operate in both California AND Nevada...and we offer it in Nevada, but NOT here (yet).
To add to the story, my prior role was in the claims department at Travelers Insurance (I read the horror story below), so I've grown familiar with every single word, sentence, and paragraph on the standard California home insurance policy. My transparent advice to California homeowners would be to pull that listing off of the market, and contact an agent that can write insurance through "a surplus lines carrier" like Lexington or Lloyd's of London. If you're insistent on making that extra income, make sure it's protected, but be prepared for a substantial cost increase. Filing a claim as a result of any type of Homesharing loss, whether it be fire or personal injury, will absolutely put your coverage into question. Imagine a full blown fire caused by a tenant, calling your insurance carrier, then receiving a letter stating not only is your entire claim denied, but you're being immediately cancelled for "misrepresenting" the terms in which your home was insured in the first place.
I hope this helps to shed some light on this, it's 7:30pm on a Friday night and I'm dreading having to make this call to try and justify an almost $6,xxx coverage option.
