Chapter 340 of Title 14 of the Va.Adminisrative Code
New rules governing fire insurance standards, particularly focusing on liability coverage for short-term rentals in homeowner insurance policies. The revised standards introduce definitions related to short-term rentals and mandate changes effective 1/1/2024 for all new and renewal policies.
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Presentation Transcript
Chapter 340 of Title 14 of the Va. Administrative Code Rules Governing Standards for the Content of Fire Insurance or Fire Insurance in Combination with Other Coverages (homeowner insurance) OR, as the insurance industry refers to them, the MINIMUM STANDARDS Currently have been in place without repeal since 1982 These new rules were proposed and posted on the Va. BOI s website and the Virginia Attorney General s Division of Consumer Counsel on September 14, 2021and published in the Virginia Register of Regulations on October 11, 2021. #IIAVEducation #learnmore
My Discussion Will be Limited to a Major Change to the Liability Coverage as it Relates to Short Term Rentals
Current Policy HO 00 03 04 91 SECTION II EXCLUSIONS 1. Coverage E Personal Liability and Coverage F Medical Payments to Others do not apply to "bodily injury" or "property damage": a. Which is expected or intended by the "insured"; b. Arising out of or in connection with a "business" engaged in by an "insured." This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the "business"; #IIAVEducation #learnmore
Current Policy HO 00 03 04 91 c. Arising out of the rental or holding for rental of any part of any premises by an "insured." This exclusion does not apply to the rental or holding for rental of an "insured location: (1) On an occasional basis if used only as a residence; #IIAVEducation #learnmore
Whats Changed? The old minimum standards for a homeowner policy mandated eight (8) definitions. The revised minimum standards for a homeowner policy mandate twenty nine (29) definitions. THERE ARE TWO NEW DEFINITIONS THAT RELATE TO SHORT TERM RENTALS:
Change Effective For All New & Renewal Policies on and After 1/1/2024 Home-sharing means rental of the whole or a part of the residence premises for lodging purposes through an online-enabled application, website, or digital network during the policy term (i) for more than seven consecutive or random days or (ii) that generates revenue of more than $2500. An individual occupying the residence premises through home-sharing is not a roomer, boarder, tenant, or guest. #IIAVEducation #learnmore
Change Effective For All New & Renewal Policies on and After 1/1/2024 Occasional rental means rental of the whole or a part of the residence premises for lodging purposes during a policy term (i) for seven or fewer consecutive or random days or (ii) that generates revenue of up to $2,500. Occasional rental is not home-sharing as defined in this section. #IIAVEducation #learnmore
WHAT DO THESE TWO NEW DEFINITIONS MEAN??? Insurance carriers may now (for new and renewal policies effective on and after 1/1/2024) exclude liability coverage for occurrences arising out of a short term rental if during any policy period there have been more than 7 rentals or if there has been $2,500 or more in revenue. #IIAVEducation #learnmore
