Have you been wondering whether you have adequate coverage on your short-term rental? When it comes to insurance for these rentals, things can get a bit confusing. It’s not always easy to find answers to questions regarding this hot topic. However, as the short-term rental industry continues to take off, more insurance companies are taking notice and adding options.
Homeowner’s Insurance Usually Isn’t Enough
When it comes to short-term rentals, some people are relying solely on their homeowner’s insurance, which unfortunately typically has holes in coverage when it comes to short-term rentals. If you do want your short-term rental to be more thoroughly covered by your homeowner’s insurance, than you should talk to an agent to find out if they have an option to add a rider or an endorsement to the policy. In some cases, this is an option. If it’s not an option, then you may want to look around for another homeowner’s insurance or get a different policy just for your rental.
Avoid Strictly Relying on a Booking Platform’s Coverage
Some people will also rely strictly on a booking platform’s protection. However, many of these platforms offer some coverage, but it’s not actual insurance. Some of these companies may even suggest that you get additional insurance on top of the protection that they offer so that you have fuller coverage in case something should happen that the booking platform can’t help with.
Different Options for Property Owners to Consider
While some property owners will choose to go with a vacation rental policy, others opt for business insurance or landlord insurance. Vacation rental policies usually dictate how many days of the year that the property can be rented out to qualify, while landlord insurance is typically more focused toward properties rented out all year.
When it comes to finding the right insurance for a short-term rental, it can get complicated. What’s best for the property owner will have to do with their specific needs and how often they rent it out. It’s important to shop around, ask questions, and get price quotes. Don’t just go with the “best” plan offered by agents. Many agents will try to sell you on the plan that will make them the most money. However, you also don’t want to find the cheapest plan possible and just say yes. You want to look over the coverage options and carefully consider what provides you with the protection you need for your property.
The main things you’ll want your insurance to cover is protection over the building and the personal property within. You’ll also want coverage that provides protection if someone steals from you (whether they break-in or the guest takes something). In addition, you should find a policy that offers liability in case of a guest injury. Liability coverage can also help cover fees in case a guest would sue in regards to the injury. Another thing that is important within the policy is some type of protection in case you would lose money due to the property being unusable for a certain given time. There are other things that you may want your coverage to include too, depending on the location. For example, natural disasters. Consider where your property is located and whether there are certain weather-related issues that you may want coverage for.
Be aware that insurance can range a bit depending on what type of insurance you get and whether you need a separate policy for your rental. Where your property is located and the specific characteristics of your property will also impact the price of your policy.
The Next Steps for Property Owners Looking for the Right Insurance
Where do you go from here? Well, it’s important to have good coverage for your short-term rental property. It’s essentially a business, so you need to make sure there’s coverage if someone would get injured, there would be a fire, your items would be stolen, or something else should happen. Otherwise, you could not only lose significant income but also have to invest a lot of money out of pocket to restore the items missing or fix the damaged property. In some situations, if the damage is too severe and the coverage isn’t good enough, it could be too expensive to repair. While it may be a little complicated or even confusing to try to find the right insurance, it’s incredibly worthwhile.
Start by finding out exactly what your current insurance covers. Ask questions, get details. If your current coverage isn’t providing the protection that you want and need, then ask if they offer other policies or add-ons that would. If that’s not an option, start shopping around. See what others are offering to try, and find something that better fits your needs. Some carriers may be able to cover everything you need including your rental and your regular home insurance, while others may require separate policies.
Do you want to make sure your property is well taken care of, has the right protection, and that you’re maximizing your investment? Reach out to us at PMI. We’re happy to assist you.
