ENJOY MY GREAT OUTDOORS

By Kevin C. Amrhein, CIC

For all the terrors unleased by COVID-19, there are silver-linings. As evidence, take the often-reported quantifiable investment spikes in wellness/personal care. Similarly, another commonly referenced “upside” to the pandemic is society’s booming interest in outdoor activities. As tourist-dependent cities and the travel industry that services them experienced massive declines in traffic, expenditures on recreational activities and equipment have risen.

If you’ve searched online for an ideal spot to take the family glamping (or for you traditional-types, camping), you may have stumbled across Hipcamp.com, yet another tech platform designed to capitalize on society’s shifting interest to peer-topeer economics. Think Airbnb but for property owners looking for renters to stay on their property – such as a vacant lot, backyard, farm, or pasture – for a daily fee. Renters may come in the form of a camper/RV or as individuals with gear.

It’s an interesting idea. But this is a column about insurance, so without further ado …

“Just What in the H#ll Are They Doing Out There?”

Unapproved use of firearms. Unsupervised fires. Improper disposal of waste. Dogs – whether allowed via the rental agreement or not – that attack resident animals. Property damage. Booze. These and many other risks should concern owners. Should any act result in a claim, there might be insurance. Or there might not be. Let’s dive in:

“The Renter Broke My Stuff!”

“Hello, insurance company? Hi, I’m calling to report that a knucklehead glamper backed his RV through my barn wall.” (Author’s note: That may have been the most fun I’ve had writing a sentence.)

Platforms like Hipcamp often entice owners by promising to pay – subject to a limit – for damage caused by the renter. As you’d expect, such promises are packed with terms which may exclude payment for any number of reasons. A few examples of possible limitations:

▲ Damage considered caused due to wear and tear,

▲ Damage caused by an animal,

▲ A settlement was accepted from the renter for less than the actual damage amount, and

▲ The owner failed to report the damage before hosting another renter.

Should damage not be compensated by the renter or the platform, owners may turn to personal insurance. Assuming that the property is insured with an unmodified ISO HO-3 (big assumption!) and that the owner is not in violation of underwriting restrictions, there is no across-theboard exclusion for damage to the owner’s property caused by a renter. That said, here are a few concerns in the HO-3’s Section I – Property Coverages:

▲ Land, including land on which the dwelling and/or other structure is located, is not covered.

▲ Other structures rented or held for rental are not covered.

▲ Damage to personal property is covered only if caused by a named peril.

▲ Animals, birds, or fish are property not covered. For example – no coverage should renter’s vehicle damage owner’s animal.

▲ Likely no coverage for loss of Fair Rental Value.

“BI or PD to/by Renter, and Everyone is Blaming Me?!”

As an insurance guy and not an attorney, I can say with conviction: Waivers are good, coverage is better.

Hipcamp and similar platforms require renter agreement to terms which include certain liability protections for the owner. Insurance folks and attorneys have been around this campfire long enough to know there are circumstances – contract ambiguity, gross negligence, etc. – which render such terms futile in any attempt to hold harmless.

Some good news is that platforms like Hipcamp often entice owners by including general liability insurance – subject to a limit (typically $1M) – for third-party claims. Should such policy not offer sufficient limits, not respond to the claim on a primary basis, or worse – exclude the claim completely – owners may turn to personal insurance. As mentioned previously regarding property, rental liability exposures are often subject to carrier underwriting rules and/or policy endorsements. Here are here are a few concerns in an unendorsed HO3’s Section II – Liability Coverages:

▲ BI or PD caused by the renter’s motorhome/RV/ camper trailer is excluded.

▲ BI or PD arising from a “business” is excluded. Note that exceptions in the definition of “business” as well as the “business” exclusion may negate this exclusion. Exceptions will depend on interpretation of undefined terms such as trade and residence. Thus, underwriting guidance is recommended.

▲ BI or PD arising out of a premises owned by or rented to others by an “insured” that is not an “insured location” is excluded. For example – renting land that is not vacant or not scheduled on the policy.

That’s all for now. Until the next round … cheers!

Kevin C Amrhein, CIC, is IA&B‘s education consultant. He works with our CISR and CIC programs, as well as our special topic seminars and live webinars. Catch him at one of our upcoming professional training offerings: IABforME. com/education.