When an insurance market is untapped, it's usually by virtue of the fact that the need hasn't been around for very long (hello drone insurance!). But every now and then, there's an under-the-radar insurance product that just gets straight-up ignored.
This week, Insurance Business magazine made the case that homestay insurance—insurance that covers someone (generally a student) who is living with a family abroad—is a bona fide example of that phenomenon; a neglected coverage area that hasn't quite received enough interest from insurers to become a standardized product.
Yet there's a lot on the line if an international guest has come to live with you.
"If you have a student come to stay in your home, a homestay parent has to be very conscious of everything from pet allergies, to environment safety, to abuse. There are lots of different liability issues that can crop up," said Ingle International chairman Robin Ingle.
Even though the arrangement may not feel all that different from an ordinary living situation, it is in the eyes of the law and corporate world, explained Ingle.
"One issue insurers have to deal with is that when a private home becomes a homestay facility, it technically turns into a business. When a private home becomes a business, even if it's done as a charitable case, some insurers would view that to be a different kind of risk to that normally associated with a private home [....] It's just like the Uber issue of people using their personal cars as a business."
The challenge for insurers will be to develop attractive policies that cover all of the unique risks and liabilities associated with this particular situation. If they do, though, the will be a sizable market waiting to use them.