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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.

Key Takeaways:

  • 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”

Read more: https://www.propertyinsurancecoveragelaw.com/2020/07/articles/insurance/when-is-the-rental-of-my-house-a-business-use-so-as-to-preclude-coverage-for-losses/

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