Derlling Fire Policy

jbtexas

New Member
3
have an prospect that has a State Farm Dwelling Fire policy on a house in San Marcos Texas, she and family use it sometimes but mainly rents it out as a bnb, I question the coverage on this dwelling. Any thoughts on this?
 
well, for one is there coverage since there is a business exposure. Under what conditions can a dwelling fire policy be issued and would there be an exclusion or if underwriting knew it was being rented out on a weekly basis would they have issued the policy in the first place. If not disclosed in the application would this represent a change of exposure either denying coverage or cancellation of the policy.
 
Probably not. By bnb I assume you mean Airbnb or a similar program and not a true bed and breakfast? I say this since you say she sometimes uses it and sometimes rents it out on a weekly basis. That does not sound like a traditional B&B.

I seriously doubt State Farm knows she is using it as a short term rental. Her agent might, but I doubt an underwriter does. Ultimately it would depend on the exact policy language, but it would be shocking to see this actually covered by the policy. Now what happens at claims time is when it gets interesting. Maybe they decide to cover it for some reason, maybe cover and cancel, who knows. It may just come down to the mood of the adjuster and claims supervisor at the time.
 
thanks, I also think it is iffy at claim time. Especially if the loss occurred with a weekend renter.
 
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