Thinking of Renting Out Your Property? Consider These Liability Risks First

Are you considering turning your spare room, vacation condo, or even your entire house into a source of income?

Renting your property through online platforms such as AirBNB and VRBO or as a long-term rental can be a fantastic way to generate a steady stream of cash. In fact, the average rental property earns up to $10,000 a year.

But before you jump on the rental bandwagon, it's important to understand the potential liabilities of being a landlord. Renting your property exposes you to a whole new set of risks compared to being a regular homeowner.

Here are some key areas to consider:

• Renter Injuries: If a renter gets hurt on your property due to a faulty handrail, uneven flooring, or another maintenance issue you were responsible for fixing, you could be liable for their medical bills and lost wages.
• Property Damage: Accidents happen. A tenant's overflowing bathtub or a grease fire in the kitchen could damage your property. While you might have some recourse against the tenant, your insurance is the first line of defense.
• Theft: Unfortunately, there's always a chance a renter or someone they know might steal from your property. While screening renters is crucial, rental insurance typically won't cover your belongings if they are stolen.
• Lawsuits: Discrimination claims, disputes over security deposits, or even noise complaints from neighbors could all lead to lawsuits. Even if you win, legal fees can be expensive.

The good news? The right insurance coverage can protect you from many of these headaches. Specifically designed to cover the unique risks of rental properties, homeowners’ policies can be enhanced to provide additional coverage. Or you can obtain a stand-alone policy to help with liability claims, property damage, and even loss of rental income.

Renting out your property can be smart, but don't underestimate the potential risks. By understanding the types of liability exposures and securing proper insurance, you can protect yourself and ensure a smoother rental experience.