Finding a public parking spot in a congested urban area can be a big problem these days. A company by the name of ParXit has developed a potential solution for the problem.
ParXit provides an online platform that enables a homeowner to rent parking space in the driveway. The website says nothing about potential insurance issues, but in an interview published in the Austin American-Statesman, founder Jonathan Kanarek said, “most homeowners’ policies should cover you if you opt to rent out your driveway.”
Let’s put his statement to the truth test.
In the ISO homeowners policy, any rental activity by the insured is considered a “business.” The definition of “business” includes an exception for activities for which the insured receives $2,000 or less in total compensation for the 12 months before the beginning of the policy period.
If the insured receives more than $2,000 in compensation for renting out the driveway, it is subject to the “business” exclusion. In that case, the insured would not be covered for liability arising out of the rental parking activities on the residence premises.
In the TDI homeowners policy, liability arising out of rental of any part of the premises is excluded with a couple of exceptions not pertinent to renting the driveway. In addition, the business pursuits exclusion probably applies without an exception similar to the ISO policy.