1. Forms
2. HO
3. HO-17-33

What the Form Is

The HO 17 33, titled "Unit-Owners Rental To Others," is an endorsement to the HO 00 06 Unit-Owners Insurance policy. Its primary function is to modify the standard HO 00 06 policy to provide coverage for certain property and liability exposures that arise when a condominium unit owner regularly rents their unit to others. Standard homeowners policies often exclude or limit coverage related to rental activities, viewing them as business pursuits. This endorsement specifically addresses these gaps by buying back personal property coverage and extending personal liability and medical payments coverage to the rental situation.

Classes of Business It Applies To

This endorsement is designed for individuals who own a condominium unit (insured under an HO 00 06 form) and regularly rent it out. This applies to various rental scenarios, including:

• Long-term rentals: When the unit is leased to a tenant for an extended period.
• Short-term rentals: Increasingly relevant for owners who use their condos for vacation rentals through platforms like Airbnb, VRBO, or other home-sharing services, provided the insurer's underwriting guidelines for this endorsement permit such use.

Real-world example: Sarah owns a condominium unit in a resort town and uses an HO 00 06 policy for her insurance. She rents out her condo to tourists for several weeks or months each year. Attaching the HO 17 33 endorsement would provide her with crucial property and liability coverage for these rental periods that would otherwise likely be excluded.

Special Considerations

There are several important points to consider when using the HO 17 33 endorsement:

• Base Policy Requirement: It must be attached to an HO 00 06 Unit-Owners policy.
• "Regularly Rented": The term "regularly rented or held for rental" is a key trigger for this endorsement. The exact definition of "regularly" can be ambiguous if not specified by the insurer, potentially leading to interpretation issues. Some insurers may have specific guidelines or limitations on the rental duration (e.g., a maximum number of weeks per year).
• Property Coverage Modifications: While the endorsement restores coverage for personal property during rental, it's important to note that there might still be specific exclusions or limitations, particularly for theft of certain valuable items like jewelry, cash, or securities.
• Liability Coverage Extension: It extends personal liability (Coverage E) and medical payments to others (Coverage F) to apply to bodily injury or property damage arising out of the rental of the residence premises.
• Not a Commercial Policy: The HO 17 33 does not convert the homeowners policy into a commercial landlord policy. For extensive rental operations or properties owned by an entity primarily for rental income, a dedicated commercial or business owner's policy might be more appropriate.
• "Where You Reside" Clause: A potential issue could arise with the standard policy language requiring the insured to reside at the "residence premises." If the unit is rented full-time and the insured lives elsewhere, this could conflict. However, at least one case resulted in coverage being upheld when the HO 17 33 was attached, signifying the endorsement's intent to cover the rental exposure.
• Underwriting Restrictions: Insurers may have specific underwriting rules, such as prohibiting rentals to certain types of tenants (e.g., students ).

Key Information for Agents and Underwriters

• Risk Assessment: It is crucial to gather detailed information about the rental activity, including the frequency (number of weeks rented per year), duration of typical rentals (short-term vs. long-term), and how the rentals are managed.
• Addressing Coverage Gaps: Agents should explain that without this endorsement, unit-owners who rent their condos face significant uninsured exposures, as the base HO 00 06 typically excludes or severely limits coverage for property damage (especially theft) and liability related to rental activities.
• Theft Limitations: Clearly communicate any remaining limitations or special limits on theft coverage for the insured's personal property while the unit is occupied by renters.
• Liability Adequacy: Review the Coverage E (Personal Liability) limits to ensure they are sufficient for the increased exposure associated with having tenants.
• Insurer Guidelines: Underwriters and agents must be familiar with their specific company's rules regarding the eligibility for HO 17 33, including any restrictions on rental frequency, duration, or tenant types.
• Distinguish from Occasional Rental: This endorsement is for "regular" rentals. If the rental is truly infrequent and incidental, other solutions like the HO 05 41 (Extended Theft Coverage For Residence Premises Occasionally Rented To Others) might be considered, though HO 17 33 provides broader modifications for regular rental situations.
• Premium Considerations: The addition of this endorsement will result in an additional premium to reflect the increased risk exposure from renting the unit.