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New endorsement responds to exposures created by the sharing economy
HomeAway. Airbnb.
Today you'd be hard pressed to find someone who isn't at least vaguely familiar with one of these services. What they have in common is that they are part of the new sharing economy that appears to be here to stay-at least for the foreseeable future. In addition, they also present a host of unintended insurance gaps for those who offer driving or home rental services.
Previously we examined insurance considerations and gaps in transportation networks; this month we'll take a look at home sharing and some of the potential insurance pitfalls associated with this activity.
Deidra L. Gunderman, AINS, AIS, API, CIIP, CISR, a personal lines underwriter with Central Mutual Insurance Companies, summarizes the home-sharing issue this way: "Home sharing is not currently contemplated under the homeowners policy. There are gaps in coverage as a result. ISO has filed an amendatory endorsement to the homeowners policy specifically defining home sharing as a 'business'. Therefore, under the unendorsed homeowners policy, this exposure is excluded."
Gunderman is referring to the Home-Sharing Host Activities Amendatory Endorsement (HO 06 53 02 17) that is used in conjunction with HO 00 03 policies. Although not all insurers use this endorsement, you can expect most companies to end up using it (or a variation of it) in the very near future. This endorsement expands on several home-based business issues that were explored in the first Mind the Gap column by:
* Amending the definition of "business" in the homeowners policy
* Clarifying coverage (including Coverage D)
* Amending the Perils Insured Against section
* Amending/clarifying exclusions.
The endorsement also adds several new definitions to the policy:
* Home-sharing host activities. This refers to renting out the residence premises along with any other related property or services made available during the rental period.
* Home-sharing network platform. This is a website, application, or digital network that facilitates the rental of a dwelling for money, a mutual exchange of services, or other compensation.
* Home-sharing occupant....