What the form is
The HO 06 62 Broadened Home-Sharing Host Activities Coverage endorsement is an addition to the Homeowners 2 – Broad Form (HO 00 02). Its primary purpose is to provide specific and broadened insurance protection for homeowners who participate in home-sharing, such as renting out their home or a portion of it on a short-term basis through platforms like Airbnb, HomeAway, or VRBO. Standard homeowners policies often have limitations or exclusions for business activities, and frequent home-sharing can be considered a business, potentially leaving the homeowner uninsured for related losses. This endorsement modifies the base policy to cover certain property damage and liability claims that arise from these home-sharing activities.
Classes of business it applies to
This endorsement applies specifically to individuals who have a Homeowners 2 – Broad Form (HO 00 02) policy and engage in home-sharing host activities at their insured residence. This means they are making their dwelling available for rent to others, typically for recreational or leisure purposes, often facilitated by a home-sharing network platform. For example, an insured who occasionally rents out a room in their house or their entire house for weekend stays to travelers would need this type of endorsement to ensure coverage for those activities.
Special considerations
- Primary Coverage: The endorsement typically clarifies that the coverage provided by the homeowners policy with this endorsement is primary over any insurance or protection plan offered by or through the home-sharing network platform.
- Definitions: It introduces or modifies definitions related to home-sharing. For instance, "home-sharing host activities" may be defined, and a "home-sharing occupant" is distinguished from traditional tenants, guests, or boarders.
- Damage to Property of Others: The endorsement may include a specific schedule to choose a limit of liability for "Home-Sharing Host Activities Damage to Property of Others," which can be higher than the standard limit in the base policy.
- Verification Requirements: Insurers may have underwriting requirements, such as inquiring about the frequency and nature of the home-sharing activities, to properly assess and rate the additional exposure.
- Evolution of Coverage: While newer ISO homeowners programs (like the HO 2022 program) have started to incorporate some aspects of home-sharing into the base forms, optional endorsements like the HO 06 62 provide more comprehensive or specific coverage for these evolving risks.
Key information for agents and underwriters
- Addressing Coverage Gaps: Agents should identify clients with HO 00 02 policies who are involved in home-sharing and discuss the potential coverage gaps in their standard policy. This endorsement is crucial for mitigating those gaps.
- Risk Assessment: Underwriters need to carefully evaluate the increased risk associated with home-sharing. Factors include the frequency of rentals, the number of occupants, the portion of the premises rented, and any safety measures in place.
- Policy Primacy: Understanding that this endorsement makes the HO policy primary is important when advising clients, especially when home-sharing platforms offer their own forms of protection or insurance, which might be secondary or have different terms.
- Premium Impact: The addition of this endorsement will likely result in an additional premium to reflect the broadened coverage and increased risk exposure.
- State Availability and Editions: Agents and underwriters should ensure they are using the correct and current edition of the form for their specific state, as availability and specific wording can vary.
