California Insurers Group Hopes Governor Signs Airbnb Bill

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Another bill dealing with the sharing economy is headed to the California governor’s desk.

A bill to ensure homeowners and renters offering rooms for rent on hosting platforms like Airbnb and Home Away understand what insurance coverage they have recently passed through the Legislature.

Senate Bill 1092, authored by state Sen. Bill Monning, D-Carmel, requires hosting platforms to provide a notice to homeowners and renters reminding them to check their insurance policy for appropriate insurance coverage prior to offering their property for rent on the platform.

SB 1092 builds on existing law enacted in 2015 that requires hosting platforms to provide a notice to renters that they should check their lease to see if such activities are permitted or may be in violation of the lease.

The bill amends the business and professions code, requiring hosting platforms to provide the following notice to an offeror listing a residence for short-term rental on the hosting platform:

“(a) If you are a tenant who is listing a room, home, mobilehome, condominium, or apartment, please refer to your rental contract or lease, or contact your landlord, prior to listing the property to determine whether your lease or contract contains restrictions that would limit your ability to list your room, home, mobilehome, condominium, or apartment. Listing your room, home, mobilehome, condominium, or apartment may be a violation of your lease or contract, and could result in legal action against you by your landlord, including possible eviction.

(b) You should review any restrictions on coverage under your homeowners’ or renters’ insurance policy related to short-term rental activities to ensure that there is appropriate insurance coverage in the event that a person sustains an injury or loss for which you are responsible, a person damages or causes loss to your personal or real property, or a claim or lawsuit is made against you or otherwise arises out of activities related to this hosting platform.”

The bill also requires notice to be provided immediately before the offeror lists property on the hosting platform’s website, and it requires the offeror to interact with the hosting platform’s site to acknowledge he or she has read the notice.

The bill is supported by the Association of California Insurance Companies, which is part of the Property Casualty Insurers Association of America.

Mark Sektnan, ACIC’s president, said the bill will help make homeowners aware that their insurance may or may not cover hosting activities.

“Different companies have different policies on how much of the property can be used by different individuals that aren’t you, but that’s a company-by-company thing,” Sektnan said. “We think it’s important they should be aware of what their insurance policy covers to make sure they themselves are protected.”

He said the bill could prompt more calls from homeowners to their insurance carriers and agents, and that agents may want to consider reaching out to clients in areas where hosting is popular.

“I think that would be an excellent service for brokers and agents to provide,” Sektnan said.

ACIC has supported several bills related to the sharing economy that passed through Legislature, including bills involving insurance and ridesharing companies.

SB 1092 moved through the legislative process unopposed.

The bill is now headed to Gov. Jerry Brown for signature or veto. Brown hasn’t indicated whether he plans to sign the bill. A spokeswoman for the governor said he rarely gives an indication of his intent to sign or veto a bill beforehand.

Sektnan was asked if he thinks Brown will sign the bill

“I would certianly hope so,” he said. “It didn’t have any issues during the process.”