National Association of Insurance Commissioners’ Sharing Economy Working Group Reviews Home-Sharing Issues, Benchmark Florida Legislation

Jul 23, 2015

Florida Insurance Lobbyist Donovan Brown

Above:  Colodny Fass’ Donovan Brown Provided Historical Perspective on Benchmark Florida Legislation at Yesterday’s NAIC Sharing Economy Working Group Meeting


There had been no known state-level precedent anywhere in the nation for home-sharing legislation at the time that SB 1298 was filed in Florida, Colodny Fass Shareholder Donovan Brown told California Commissioner Dave Jones and other regulators during the National Association of Insurance Commissioners’ Sharing Economy Working Group (“Working Group”) meeting yesterday, July 22, 2015.

Introduced by former Senate Banking and Insurance Committee Chairman David Simmons, SB 1298 represented the Central Florida legislator’s effort to comprehensively address the most significant sharing economy issues currently impacting the state, Mr. Brown added, in answering a number of questions posed by the Working Group regulators.

Florida Office of Insurance Regulation Director of Property and Casualty Product Review Sandra Starnes presented the various home-sharing provisions of SB 1298 at yesterday’s meeting to provide a benchmark for regulators in their charge to study issues related to the sharing economy, as well as consider the development of a model law or guideline to address regulatory concerns with insurance coverage for the sharing economy.

To view the OIR’s summary of SB 1298, click here (begins on page 14).  The bill included certain definitions used in the home-sharing economy, such as “short-term rental network company” (also known as an “RNC”).  It also would have established insurance requirements for RNCs, which have been typically regulated by municipalities in the past, Ms. Stearns explained.

Perhaps more significant because of the questions it left unanswered, SB 1298 illuminated myriad insurance-related concerns with the home-sharing trend, such as whether coverage could be considered personal-residential or, if it were for an a multi-unit dwelling, whether it could be construed as a master policy.  In the latter case, the issue of who would pay the premium was also unclear.  Further, the bill did not offer protection against cancellation of a regular homeowners policy.

From a regulator’s perspective, the bill also did not specify whether there was any clear authority of who would control the insurance product or be able to penalize the insurer, or how.  Insofar as whether an insurer would have to be admitted was also unclear, although Ms. Stearns specified that, to her knowledge, a surplus lines carrier could have provided the coverage prescribed by SB 1298.

Yesterday’s Working Group meeting centered around presentations from two prominent home-sharing companies, AirBnB and HomeAway–each with different target markets.

Sharda Caro, the AirBnB presenter, estimated that an average of 400,000 people are using the company’s services on a nightly basis worldwide.  Focusing on the insurance-related aspects of AirBnB’s  business platform, she elaborated on the difference between its “Host Guarantee” and “Host Protection” programs.

Considered to be more of a property damage backstop, AirBnB’s Host Guarantee is not insurance and doesn’t replace homeowners’ or renters’ insurance, she said.  In disputes over property damage, AirBnB provides an online conflict resolution “tool” managed by its third-party administrator, United Specialties.  In cases where no resolution can be reached, the AirBnB representative indicated that AirBnB would attempt to reimburse the damages under certain circumstances.

“We’ve spent some time thinking about this,” Ms. Caro said in reference to the Host Guarantee program.  “It’s hard to have clear visibility into what might work better than what we have right now, only because the industry is so relatively new.  A product covering occasional rentals would be well received.”

AirBnB maintains in insurance program it calls “Host Protection Insurance,” which is designed to cover third-party claims of bodily injury or property damage in excess of a host’s own insurance for qualifying incidents.  Ms. Caro explained that this program had been launched only just this year and that only 20 claims have been filed to date–seven of those within the first 30 days of the launch.  She said that, although most of the claims are for small amounts, AirBnB’s claims administrator is still in the process of ruling out primary coverage.

AirBnB’s Host Protection Insurance carries a cap of cap of $1 million per incident and $2 million per location, except in New York and Illinois, where separate policies are maintained with different caps because of those states’ statutes relating to group insurance.

Regulators on the call had many questions of AirBnB, such as whether a guest’s own insurance would be tapped in the claims handling process.  Ms. Caro explained that AirBnB’s Host Protection Insurance did not have any exclusions, so to her knowledge would apply to guests as well.

She clarified that, although the AirBNB’s Host Protection Guarantee was not insurance, it was technically considered to be a commercial agreement that carried with it a commensurate obligation.

Jeff Hurst, Chief Strategy Officer from NASDAQ-traded HomeAway spoke next.  He described his company as ” . . . overwhelmingly geared to serve owners of second homes and vacation markets with no significant overlap with AirBNB, which targets people living in primary residences.”

Rather, HomeAway offers services to homeowners and property managers to list entire properties for rent.  These listings are marketed as vacation rentals, as opposed to the sharing economy market.

He was joined by his company’s insurance partners, which included representatives from Generali, Italy’s largest insurance company, and CBIZ, which provides a commercial homeowners policy used in HomeAway’s business platform.

Generali’s U.S. Branch, an admitted carrier in all states, U.S. jurisdictions and territories, provides two traveler-oriented insurance products through HomeAway that are filed and approved in all 50 states and in the District of Columbia.  Administered by CSA Travel Protection and Insurance Services (a licensed Managing General Agent in all 50 states and U.S. jurisdictions and territories), all products are offered to travelers on an optional basis as part of a HomeAway rental transaction.

“HomeAway Assure,” an owners insurance product brokered by CBIZ and underwritten by Lloyd’s and Western World Insurance Company, is an optional product offered to homeowners to replace their standard homeowners’ policy.  It does not cover their vacation rental business activities. 

CBIZ Insurance Services Senior Vice President Scott Wolf, who was on hand for the presentation, explained that, since many vacation rental owners are known to dabble repeatedly in the market, this type of policy was only available on an annual basis, regardless of how long a single rental is.  Premium rates increase based upon the number of occupants, which increases liability.  A non-admitted surplus lines company is used to cover extreme risks, such as coastal properties or properties that feature horseback riding, for example.

Chaired by Commissioner Jones, the Sharing Economy Working Group recently completed its work on a white paper, entitled “Transportation Network Company Insurance Principles for Legislators and Regulators.”

In March 2015, the NAIC issued a consumer alert on insurance issues involved in home sharing.  To view the alert, click here.

To view yesterday’s agenda, click here.  To access the meeting materials, click here.  (Please note that, although the materials do not include any written presentation from AirBnB, Ms. Caro advised those in attendance that one would be forthcoming.  Colodny Fass will provide this presentation upon its publication.)


Should you have any questions or comments, please contact G. Donovan Brown at Colodny Fass (+1 850 545 8864 or



Click here to follow Colodny Fass on Twitter (@ColodnyFassLaw)


To unsubscribe from this newsletter, please send an e-mail to