California Apartment Association

Legislation that would encourage prospective hosts to review their insurance policies before getting into the home-sharing business has advanced to the Senate floor.

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.

The bill passed the Senate Judiciary Committee on Tuesday, May 3, by a 6-0 vote.

The insurance notice builds on a disclosure required under legislation sponsored by the California Apartment Association 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.

If the hosting platform provides primary insurance coverage for the rental period, it may provide an alternate disclosure encouraging the host to review that insurance coverage.

Insurance policies vary greatly when it comes to guests and limited periods of commercial use. In some cases, an insurance plan may leave the host liable for injuries or property loss that occurs during a short-term rental.

 

Related content: 

• Gov. Brown signs CAA-sponsored vacation-rental bill (CAA, Aug. 19, 2015)