Short-term vacation rental properties are popping up everywhere, especially in popular resort areas like the Lake Michigan shoreline. From South Haven to Saugatuck, Covert to Glenn, and the inland lakes and beyond, vacation rentals are big business. But once you’ve furnished the house just right and found the right property manager, before you open your home to guests, make sure you aren’t putting your investment at risk by carrying the wrong insurance.
Three key things to consider when it comes to vacation rental property insurance:
What’s At Risk – With a vacation rental, obviously you want to insure the structure of the house itself. But other areas of risk that need insurance protection include covering your liability, in case you’re sued for a tenant injury on the property. Also consider coverage on the furnishings of the home, as well as coverage for rent you would lose in the event of a fire or claim, when the house was under reconstruction.
Homeowners Insurance Will Not Protect You – Homeowners policies include exclusions for business activities, and occupancy requirements that exclude rental use. If the house was used as a rental and a fire or liability claim arises, your insurance carrier could easily deny coverage, leaving you with no protection at all.
Vacation Rental Policies Are a Must – Vacation Rental insurance can still protect your house much like a standard Homeowners policy—such as with replacement cost coverage or premises liability coverage. Premiums are often a little higher than a traditional homeowners policy, but it’s worth paying a little extra to know that you aren’t in danger of a denied claim based on rental of the home.
Vacation rental policies also allow more flexibility than most homeowners policies, such as allowing LLCs or Trusts as named insureds, and typically not placing limitations on number of weeks rented out each year.
Be sure that you’re properly protected with your rental property. Feel free to contact Hardt Insurance with any questions about your vacation rental property.