Legislation that would encourage prospective hosts to review their insurance policies before getting into the home-sharing business now awaits the governor’s signature.
On June 27, a few days before the Legislature adjourned for its summer recess, the state Senate approved SB 1093 by a 38-0 vote with two abstentions.
Senate Bill 1092 would require companies such as Airbnb, HomeAway and Flipkey to post disclosures about the importance of confirming insurance coverage related to short-term rentals. Under the bill, the person offering the property would have to acknowledge, through the hosting platform’s website, that he or she has read the insurance notice.
Sen. Bill Monning
“As short-term rental websites grow in popularity, many users of the sites are unaware of the insurance ramifications if damage to the property or injury at the property occurs during the rental period,” the California Apartment Association said in a letter supporting the legislation. “It is important for individuals who list their properties through internet hosting websites to understand their insurance coverage and whether it will protect them in the event that something unfortunate occurs during the short-term rental of their property.”
The insurance notice builds on a disclosure required under legislation sponsored by CAA last year.
That legislation, SB 761, requires that short-term rental companies post a notice advising tenants to check their rental agreements before listing property.
This is important because many leases ban the activity.
SB 1092 by Sen. Bill Monning, D-Carmel, serves a similar purpose — urging hosts to do worthwhile research before listing a property on an online-sharing platform.
Just as many tenants are unaware that subleasing is often prohibited, many hosts don’t know the insurance ramifications should property be damaged or someone get hurt during a short-term rental.
“Different companies have different policies on how much of the property can be used by different individuals that aren’t you, but that’s a company-by-company thing,” Mark Sektnan, president of the Association of California Insurance Companies, told the Insurance Journal. “We think it’s important they should be aware of what their insurance policy covers to make sure they themselves are protected.”