Renting property is a good way to make money. However, it is important to appreciate at what point the process is deemed a business move. One homeowner found out too late that they could not claim on fire damage to their rented home, because the homeowner’s did not cover a business rental. The two and a half year lease was made with a friend, but was nonetheless deemed an uncovered business purpose by a federal appeals court, particularly as the length of the stay was such that it could not be deemed an occasional lease such as would occur with vacation rentals.
- Be careful when renting your home, because long-term renting could interfere with your insurance policy.
- Insurers can deny coverage because of use of the home as a business, including as a rental.
- Read on to learn about one case in Michigan where their insurance was denied.
“The insurer maintained the insureds were not using their Michigan home as a private residence, but instead for an uncovered business purpose”