What You Need to Know About Vacation Rental Insurance
Are you thinking about renting out your vacation property in the Outer Banks? If you are, then one of the first things you need to think about is making sure you have the insurance needed to protect your property against theft and damage.
As with any type of insurance policy, you will want to make sure you shop around and look at what the different companies are offering. This way, you can find the option that will suit your specific needs the best. Of course, you might not know where to begin. That’s where this post will come in handy. It acts as a guide to get you started in the right direction.
Know the Laws
One of the first things you need to do is look up the regulations in your area to make sure you are getting the right type and right amount of coverage for a rental insurance property. Keep in mind that a typical homeowner’s policy is not going to cut it if you plan to rent out your home regularly. It will not cover damage or theft that is associated with your guests, and that could be a huge problem. Instead, you will need to have a separate policy – a commercial policy or a landlord policy.
If you fail to get the proper type of coverage, and the insurance company realizes this, they may deny any claims that you might have. You are running a business, and you need to treat it as such.
What Does the Coverage Offer?
When you have commercial insurance, it will have two main components that cover the property, as well as liability. The property section of the policy determines the coverage for the belongings and the physical structure from damage, such as fire. The liability coverage is to provide protection for you in the event of an injury on the property. Always check the policy to make sure it has all the coverage that you need for your property.
The following are some of the things that you need to make sure are included in your policies.
- Loss of income coverage will provide you with protection if you are unable to rent the home out because of a property loss.
- Replacement cost for personal property, as well as the structure.
- Personal liability coverage.
- Supplemental coverage that can include damage caused by the tenant, pet coverage, theft of owner’s personal property, and liquor liability.
- Make sure there are no coverage restrictions due to vacancy in the home.
- Look for additional coverage that can provide protection if you have items deemed attractive nuisances on your property. This could include things such as hot tubs, swimming pools, and even trampolines. These are different types of items that could attract people to the property who should not be there, such as children and teens. It can provide you with protection in the event they are injured when they are on your property, even when they are not supposed to be there.
- Getting an umbrella policy could be a good option for some people, as well. This is particularly true for those who have high net worth, as it can provide protection for assets in the event of being sued by a tenant.
It is also important that you think about damage from flood, wind, and other potential issues that you might face. Keep in mind that some types of damage, including flood damage, are not covered by typical insurance policies. This includes standard commercial policies. You will need to have additional coverage to make sure you are completely covered for any potential issue that could come your way.
Work With a Great Agent
You might want to consider looking for a commercial insurance agent that you can work with. Ideally, you will be working with an insurance agent that has experience with vacation rental properties. They can explain the various policies to you and make sure that you have all the coverage you need. Ultimately, it will help you to make a smarter and more informed decision regarding the policy that you choose.
When you are searching for an agent, consider asking others who rent out their homes to see if they use an agent and could provide a referral. If you do not know others who have rental properties, you can research the agent and their company online to get a better idea of what they offer, their experience, and their reputation.
You need to put a substantial amount of thought into the insurance company that you choose as well. It is never a good idea to choose a "fly by night" company that does not have any sort of reputation in the field, and that only serves to entice you with low prices. You need to make sure you are working with a quality company and that you are getting the best policy for the money. Always make sure you are looking at the prices based on equal coverage limits when you are comparing policies.
Some Closing Tips
You always want to make sure your property and items are protected from damage the guests might cause. By following some simple tips, you can help to keep you and your property safer.
First, make sure you catalog all the personal belongings that you have in the unit, large and small alike. Those who are working with rental management companies should always make sure they know the policies put forth by those companies. Your guests need to be aware of your policies, so make sure they have a copy of them. This can help to prevent misuse of the property. Finally, make sure you have a copy of the guest’s credit card on file.
Never take proper insurance for granted. Even if you feel you are choosing great tenants and you are in a safe location, you need to have proper coverage with a policy or policies that provide you with the best overall protection.