Vacation Rental Coverage – not what you’d expect!
Did you know that most insurance carriers do not provide coverage for this property type?
Did you know that most insurance carriers will deny any claim for a property used as a short-term vacation rental?
Most property owners understand that a long-term rental must be insured under a specific type of insurance policy. That policy is called a ‘Dwelling Fire’ policy. Several questions must be answered regarding the types of perils to be covered, the amount of personal property to be covered, even whether or not Extended Liability coverage needs to be provided to an LLC that holds title to the property. (Yes, we recommend placing the property in the name of a separate entity for several reasons associated with risk management!)
However, short-term rental properties are not covered by the standard Homeowners policy (HO-3, HO-5 or HO-6) or by the standard Dwelling Fire policy (DF-1, DF-2 or DF-3). You will instead need to find a carrier that provides vacant property property coverage that includes short-term rental coverage as well as this type of policy will be written and rated with consideration for the higher risk associated with a short-term rental property. Additionally, you will also want to make sure that your guests are purchasing Accidental Rental Damage Insurance to provide coverage for any accidental damage that may occur during their visit. This type of insurance coverage will also eliminate the need for security deposits too!
If you own a rental property, whether vacation rental, short-term or long-term, you need to make sure your current insurance policy provides the coverage you need. More importantly, you need to know how coverage is triggered.
We can help provide coverage that will be triggered in the event of an accident. Don’t wait until it’s too late to find out that you don’t have coverage. Contact us for a complimentary review and audit of your current coverage