Boston city council recently passed a new set of stringent laws regulating Airbnb and other short-term rental companies though the city. According to the new law, investors and tenant will not be permitted to rent out property by the night, beginning January 1st, 2019. If you’re currently an investor or tenant and use Airbnb, you have an extended grace period of September 2019.
According to regulators, Airbnb and other vacation rentals have significantly impacted the apartment, hotel, and housing markets. Officials have said that nearly 2,000 apartments are being rented out by the night in Boston instead of through traditional 12-month leases. As a result, certain businesses are suffering while vacation rentals prosper.
On the other hand, property owners say they have a right to rent out their property as they wish.
Boston City Airbnb Regulations and Fines
Property owners will be required to register with the city and pay a $200 annual fee. As with most other cities regulating rentals, there are fines and consequences for property owners who don’t abide by the new laws. However, it’s not exactly clear how officials will enforce these new policies. Some states have chosen to create a “short-term rental enforcement” department but this sometimes requires significant budgetary approval. Because of this, many property owners are ignoring the regulations set forth in other areas.
No Talk of Airbnb Insurance Coverage Requirements
While cities across the world are still trying to create legislation for the explosion in short-term rentals, few officials have addressed the elephant in the room: commercial liability insurance.
A big source of Airbnb insurance problems is the lack of coverage property owners have. When it comes to renting out your home, most new property owners don’t realize that their homeowner’s insurance does not cover rental situations. This often leaves them uninsured and exposed to two of the biggest issues in the rental business: liability and property damage.
As for property damage, this is self-explanatory. When your home is damaged, it’s normally your homeowner’s insurance that steps in to take care of the bill. But if a guest wrecks your property, then you may just find yourself having to pay for the repairs out of your own pocket!
Now there are some built-in coverages with Airbnb like the Host Protection Insurance and the Airbnb Host Guarantee. But these free coverage plans rarely offer more than a false peace of mind. Because of the very nature of free insurance, it’s difficult to offer comprehensive coverage without a long set of exclusions and restrictions. Unfortunately, this is often the cause of many Airbnb insurance issues. Just take a look online for yourself – there are countless stories of denied claims and people who’ve never been reimbursed for damages.
Airbnb Liability Insurance – Why You Need It
The other issue is with liability. When someone enters your home, you’re legally obligated for their safety and wellbeing – even if they’re only renting for a single night. That means if they trip down the stairs, you could find yourself in a medical lawsuit that lasts for years – even if it wasn’t your fault. These types of liability claims and legal battles often cost significant amounts of money, which is why it’s critical that property owners maintain adequate home insurance for Airbnb or other property rental platforms.
Fortunately, some cities are now beginning to require property owners maintain a minimum level of coverage. If you’re using Airbnb, FlipKey, or another property rental service to rent out your home, consider using Proper Insurance for your coverage needs. Proper Insurance replaces your current homeowners plan and acts as an all-in-one coverage against property damage, liability, and business income., plus it meets all city requirements for short term renting!