Clarification about injury liability when subletting or short term rentals

[kslays]

If I sublet or rent out a room in my apartment (e.g. through Craigslist, Airbnb, or VRBO), and the person I rent to is injured due to my negligence, would Lemonade cover it? Specific language in the policy about renting out a room is very hard to find and would be extremely comforting.

[JohnSPeters]

@kslays Thanks for the comment. I agree that we should clarify the rental issue more, as it is more and more common. This is just the core coverage so far.

The approach in our current policy is that limited rental is included automatically - typically 14 days per year or less. If you rent 15-30 days, you can purchase additional coverage. If you rent more than 30 days, you are more of a landlord and not a renter, and the policy is not appropriate.

Liability would be included; theft would be excluded or limited unless you purchased additional coverage. Does that approach make sense?

[kslays]

I think spelling it out in the written policy so there's no ambiguity is the most important part. Getting a surprise denial destroys trust. Add on options would be great as well. Liability is certainly crucial, with the exclusion of theft understandable. For both liability and theft, the writing should make clear about the situation when someone steals from or is injured by your housemate or paying guest, vs the situation when your housemate or paying guest steals from or is injured by you.

There are lots of homeowners policies that are fine with renting out a room in your home for the whole year. Many homeowners I know are in this situation, and a whole lot of renters are permanently subletting to their housemates. It sounds like it's more common than you realize, especially in the Bay Area, New York, Boston, etc. In homeowner policies I've reviewed, the 14 day limit is usually for renting when the policy holder is not home. There is usually no limit (or a MUCH higher limit) for when the policy holder is home sharing all the facilities with the short term renter.

[JohnSPeters]

@kslays I can see how this would be a bigger issue for homeowners/condo policies, where you own the property and are renting a room. Our industry-standard policy allows that as well. When we expand this effort to home/condo, I think you are exactly right.

For now, this product is renters only. We don't require your name on the lease to get renters insurance, so if you have two people living at the address, we'd ask that each get their own renters insurance policy - even if one is 'subletting' from the other. In that case, you would be covered for liability to and theft by your roommate.

[kslays]

That makes perfect sense. It should be spelled out in the policy, and your wording is clear. It would be good to specify what happens if you don't each get your policy. Here is some sample text:
"We invite your housemates (regardless of whether they pay you or the landlord) to purchase coverage from us as well. If they don't, then their stuff won't be covered, they won't be covered for liability claims, and you also won't be covered if they steal from you or are injured by you."

The policy should also spell out coverage for when a renter uses Airbnb etc. for the extra room in their apt. It's totally ambiguous right now! Something like the following would help:
"If you rent out a room for less than one month at a time (e.g., using services like Airbnb, VRBO, etc.) then your guests will not be covered for theft or liability. Further, if they steal from you, or are injured and you are found at fault, you will not be covered."