Renting out your pool? Beware the home insurance liability pitfalls

With the summer very nearly on its way out, if you're looking to make a little extra cash, here's a new side hustle for you: renting out your swimming pool. 

Thanks to a new U.S.-based Airbnb-esque online service called Swimply, which launched in 2018 and serves as an online directory for those looking to list and rent their private pools across North America and Australia, it's become the new popular go-to.

It's only just beginning to make a ripple in Ontario, however. In Toronto, there are about 100 current listings, which have homeowners renting their backyard pools for anywhere from $30 to $100 per hour.

While it sounds like a simple way to make a quick buck, there are some causes for concern, particularly when it comes to liability and home insurance.

Renting out your pool is a “business use of your home”

"Most homeowners' insurance policies are intended to cover the occupancy and use of your everyday home, and that's a simple process because most people occupy and use their homes in fairly predictable and standard ways," says Stefan Tirschler, product and underwriting manager at Vancouver-based Square One Insurance Services. "The challenge is that certain uses of a home – like renting your pool, which is a business use of your home – are not covered and might require a higher premium. Therefore, insurers would need to take a closer look at that in order to know how much to charge."

Someone doesn't actually have to get hurt in order to sue you. All they have to do is say that they were harmed in some way because of your property

In other words, your policy is unlikely to already speak specifically to the renting out of an individual amenity. But once you start renting out a portion or all of your home for compensation, that would fall into the purview of most policies’ business use exclusions, and any claims arising out of that business use wouldn’t be covered. 

If someone renting my pool hurts themselves, will my home insurance cover me?

Questions like this are exactly what plagued Airbnb when it first became popular in 2010. For renting your pool, the answer is no. If someone were to sue you because they injured themselves while swimming in your pool during their rented time and allege that it was your negligence that resulted in their injury, your homeowners insurance policy would not protect you from any damages.

Tirschler explains, "A common objection people might have is 'What are the chances someone's going to get hurt in my pool when I take great care of it? It's new, it's safe, and I'm watching.' One important reminder is someone doesn't actually have to get hurt in order to sue you. All they have to do is say that they were harmed in some way because of your property, and that's all it takes for you to be in the position of needing to defend yourself."

You could even face a renter claiming to have developed or noticed an injury days after they were enjoying your pool and – potentially inaccurately – attribute it to having used it when in fact it might have been due to something else in the days since then.

Tell your home insurance provider you’re renting your pool and get the right coverage

But there is a solution here: notify your home insurance provider that you plan to rent out your pool – or whatever part of your property – for business purposes, so they can tell you what coverage you might already have that pertains to it, and/or what you might need that you don't already have. If you don’t, you also risk your policy not being renewed.

"You want to make sure that your provider is aware of anything that you're doing not only because of the liability aspect, but because that exclusion is in there for property used for business. Also, not all home insurance providers might be comfortable insuring a home that has a business or revenue generation activity," says Tirschler. "If you don't notify them, that doesn't mean that the exclusion doesn't apply to you. All it means is you won't find out about the exclusion until you make a claim for what's excluded."

Swimply’s liability coverage may not be enough for homeowners

Here's an additional cause for concern: although Swimply offers $1 million in liability insurance for American renters, it’s still somewhat fuzzy whether or not the same coverage is extended to its Canadian users. This recent CBC article, for instance, states that the company hopes to bring the coverage to Canada in 2022. But when reached for comment for this story, a Swimply spokesperson said, “Although our $1M host liability policy was designed for the U.S., the policy as written does not exclude Canada bookings as Canada is part of the coverage territories. Canadians are not excluded, so they are covered as well.” 

That said, $1 million in liability coverage may sound like a lot but it can get eaten up pretty quickly in a lawsuit. It’s likely that amount won't cover you entirely, or even to the halfway point. So if you're planning on using a service like this one, you're going to want to read the company's policy very carefully.

"For example, Swimply doesn't cover losses not reported within 72 hours of the date of reservation,” says Tirschler. “Depending on the person, that could be problematic, especially when you consider that many liability scenarios don't always happen right away. So if you were to rent your pool to someone, and two or three months later you receive your first notice from them in which they allege an injury, if a policy had a really strict reporting timeline on it, then it still might not be of assistance to you."

All of which is to say, if you’re considering taking the plunge and renting out your pool, read the service’s terms and conditions carefully and get acquainted with the finer print in your home insurance policy, too.