Understanding Vacation Rental Insurance Coverage

Understanding Vacation Rental Insurance Coverage

Every business has risks, and short-term rentals--like vacation properties--are no exception. Even well-meaning guests can cause accidental damage, and almost everyone is susceptible including vandalism and natural disasters.

Fortunately, there are mechanisms to eliminate or at least minimize these threats. This is where vacation rental insurance comes in.

This article covers the basics of vacation rental insurance coverage. It will help you understand what these policies protect against, what they do not, and how to select a plan that gets you the coverage you need. Keep reading to learn more before you purchase insurance.

What Is Vacation Rental Insurance?

Vacation rental insurance coverage is a specific type of policy designed to protect short-term rentals. Most policies cover almost every scenario that can arise. Common ones include:

  • Accidental damage by guests
  • Intentional damage by guests
  • Weather-related damage
  • Civil liability protection

Vacation rental policies can ensure compensation for property damage, regardless of the cause. They also can protect from lawsuits, should a guest become injured during their stay.

Do I Need Vacation Rental Insurance Coverage?

Regular home insurance does not cover the types of scenarios that can arise through short-term rental. Nor does personal liability insurance or general policies for regular landlords.

For instance, while it may cover injury to people who are on your property as guests, liability coverage does not extend to renters. So, if you live in a property that you rent out on occasion, do not assume that your existing policies will suffice.

What About Airbnb and VRBO Coverage?

If you rent out your property through host platforms like Airbnb or VRBO, you may be wondering if you need additional coverage. These companies provide a basic level of insurance, but you should be aware that it is likely very basic and has myriad coverage restrictions.

First, there is an arbitrary coverage cap, regardless of the type of property you own. These are often changing, but Airbnb currently covers $1 million in damage and $1 million in liability.

Depending on your property, this may not be sufficient. Also, $1 million in liability may be a drop in the bucket if a guest is severely injured and holds you liable.

There are many exclusions with these policies. Most do not cover normal wear and tear on the property, or loss due to acts of nature. This includes hurricanes, earthquakes, and other natural disasters.

They also do not cover theft, vandalism, or intentional damage caused by guests. Some companies do not cover liability at all.

It is easy to see the glaring gaps and potential out-of-pocket costs this could open you up to. With a dedicated vacation rental insurance policy, you will be covered in all the above scenarios. You can also choose the amount of coverage needed to protect your property and other assets.

Get Vacation Rental Insurance Today

Now that you understand the basics of vacation rental insurance coverage, you can determine if it is right for your Lake Worth property. An experienced property manager can further assist you in selecting the best insurance policy and coverage parameters.

PMI Jewell is a property management company serving Fort Lauderdale and the surrounding areas. We provide a variety of services, including short-term rental management. Reach out to us today to schedule a free consultation to discuss types of insurance or other management services.