1. Forms
2. HO
3. HO-06-63

What the form is

The HO 06 63 Broadened Home-sharing Host Activities Coverage Endorsement is an Insurance Services Office (ISO) form that modifies a standard Homeowners 3 - Special Form (HO 00 03). Its primary purpose is to provide specific coverages for property and liability exposures arising when an insured engages in "home-sharing host activities." Home-sharing typically involves renting out all or part of one's residence for short-term stays, often facilitated by online platforms like Airbnb or Vrbo. Standard homeowners policies may exclude or limit coverage for such activities, often viewing them as a business pursuit. This endorsement buys back or broadens coverage for these specific scenarios.

Classes of business it applies to

This endorsement applies to owner-occupants of dwellings insured under an HO 00 03 policy who participate in home-sharing. This includes individuals who:

• Rent out a spare room while they are still residing in the home.
• Rent out their entire home for short periods, such as while they are on vacation.
• Utilize a home-sharing network platform to facilitate such rentals.

For example, if an insured rents their home through Airbnb for a weekend and a guest accidentally causes a fire, this endorsement would provide coverage that might otherwise be denied under an unendorsed HO 00 03 policy. Similarly, if a paying guest is injured on the premises during a home-sharing stay, this endorsement addresses liability coverage.

Special considerations

• Definitions: The endorsement typically includes specific definitions for terms like "home-sharing host activities," "home-sharing network platform," and "home-sharing occupant." These definitions are crucial for understanding the scope of coverage.
• Interaction with Base Policy: It modifies exclusions in the base policy, particularly those related to business activities and rental to others, but only as they pertain to the defined home-sharing activities.
• Damage to Property of Others: The endorsement often includes a schedule to specify a limit of liability for "Home-sharing Host Activities Damage To Property Of Others," which can be higher than the base policy's limit for damage to property of others. If no increased limit is selected, a default limit (e.g., $1,000) may apply.
• Primacy of Coverage: The endorsement may state that coverage provided by the policy for home-sharing activities is primary over any insurance, protection plan, or guarantee offered by or through the home-sharing network platform.
• Theft and Vandalism: It can provide coverage for theft or vandalism by a home-sharing occupant, which might otherwise be excluded.
• Personal Injury: If the underlying policy includes Personal Injury Coverage (e.g., via HO 24 82), this endorsement may provide an exception to the business exclusion for personal injury arising out of home-sharing host activities.
• Fair Rental Value: Coverage for lost rental income (Fair Rental Value) may be provided if a covered loss makes the home-sharing portion of the residence unavailable, or even if a rental is cancelled due to an official hurricane warning.
• Verification Requirements: A condition may be included allowing the insurer to inquire about the frequency of home-sharing to adequately underwrite and rate the exposure.

Key information for agents and underwriters

• Risk Assessment: It's crucial to thoroughly understand the nature and frequency of the insured's home-sharing activities. This includes the portion of the dwelling rented, the typical number of occupants, and the average duration of stays.
• Underwriting Guidelines: Insurers will have specific underwriting guidelines for this endorsement. Very frequent or extensive home-sharing might still be considered too commercial for a homeowners policy and may require a commercial lines policy.
• Pricing: This endorsement typically carries an additional premium to reflect the increased risk associated with home-sharing.
• Coverage Limitations: Agents should clearly explain any remaining limitations or exclusions even with the endorsement attached. For instance, while theft by a home-sharing occupant might be covered, specific sub-limits or conditions could apply.
• Clarity on "Business": While this endorsement addresses home-sharing, other business activities conducted on the premises would still likely be subject to the policy's standard business exclusions unless separately endorsed.
• Local Ordinances: Agents should advise insureds to be aware of and comply with any local ordinances or regulations regarding short-term rentals, as non-compliance could potentially affect coverage or create other legal issues.
• 2022 ISO Program Changes: The 2022 ISO Homeowners Program incorporated certain definitions and exclusions related to home-sharing directly into the base policy forms. This endorsement (HO 06 63) is designed to work with these updated forms to broaden back specific coverages. It's important to use the correct edition of the endorsement with the corresponding policy edition.