The sharing economy: Tips about Safeco’s home coverage

By Safeco Insurance

The sharing economy is allowing people to turn their homes into part-time hotels with companies like Airbnb, VRBO, HomeAway, and Couchsurfing. Thanks to ride services like Uber and Lyft, the sharing economy is also providing people with options beyond traditional taxi service.

At Safeco Insurance, we are embracing this trend because we know many of your customers already participate in the sharing economy or are interested in doing so. We’ve also heard from agents through Safeco’s Advisory Council process, that you want Safeco to address the sharing economy.

Safeco is currently developing insurance products that will provide consumers with comprehensive insurance solutions for both home and auto sharing. We are working to introduce a ride-sharing product in a limited number of states this year and are developing a home-sharing endorsement with expected availability in 2017.

Safeco® Homeowners policy summary

In the meantime, we understand there is a need for a summary of our current contract language. The following information is designed to provide you with the information you need to advise your customers about Safeco’s home coverage as it pertains to home sharing. (AK, CA, NC, TX, VA, please see note at bottom of page for contract clarification.)

Here are the key policy provisions that could impact coverage in home-sharing situations and an important clarification for the term “occasional.”

Safeco contract language Coverage summary
Section I – Coverage A Dwelling Coverage for the insured’s dwelling is provided for home-sharing activity as long as the property remains the insured’s “residence premises,” as defined by the policy.
Section I – Coverage B Other Structures

No coverage is provided for any other structure used in whole or in part for business or rented or held for rental to a person not a tenant of the dwelling, unless used solely as a private residence or garage.

Coverage for the insured’s other structures is provided for home-sharing activity when the structure is being used in whole or in part as a private residence, such as a garage apartment or guest house.
Section I – Coverage C Personal Property

All personal property in a location on the residence premises is excluded when the location is rented or held for rental for more than 31 days in a calendar year. There is an exception to this exclusion that does not apply to property of an insured in a sleeping room rented to others by an insured on the residence premises.

We cover accidental direct physical loss to personal property caused by theft, including attempted theft and loss of property from a known location when it is likely that the property has been stolen. This peril does not include loss caused by theft from that part of a residence premises rented by any insured to other than an insured.

The insured’s personal property may only be covered if renting the home in whole or in part for up to 31 days in a calendar year. Furthermore, there is no coverage for theft when the property is in that part of the residence rented to others.

If renting a sleeping room, the insured’s personal property located within that room is covered with no time limit.

There is no coverage for property of roomers, boarders, tenants or other residents not related to any “insured.”

Section I – Coverage D Loss of Rent

If a loss covered under this Section makes that part of the residence premises you rent to others or hold for rental uninhabitable, we cover your loss of rent, meaning the rental income to you from that part of the residence premises you rent to others at the time of the loss, less any expenses that do not continue while the premises is uninhabitable.

Payment shall be for the shortest time required to repair or replace the damage, but not to exceed 24 months.

The insured may have coverage for actual loss of rent or income from home-sharing activity if a covered loss makes that part of their home uninhabitable. Coverage will not exceed 24 months and is subject to the policy limit pertaining to Coverage D.
Section II – Liability

Business pursuits of any insured are excluded. An exception is provided for the rental or holding for rental of an “insured location” on an occasional basis for the exclusive use as a residence.

Home sharing falls within the exception to the business pursuits exclusion when it is done on an occasional basis – no more than 31 days during the calendar year. Any home-sharing activity that exceeds 31 days during the calendar year may not be covered.

Note: Coverage for any loss or damage is determined on a case-by-case basis and depends upon the unique facts and circumstances of each claim, as well as the terms of the policy issued to the policyholder.