Vacation Rental Insurance for Owners
As a vacation rental property owner, you take on certain inherent risks associated with renting your property to guests.
Here we will explore how you can protect yourself, your short-term vacation rental property, your vacation rental business, and your guests with the right insurance protection. We’ll also cover a few common mistakes property owners make when acquiring insurance and examine the types of coverage you need to properly insure your vacation rental.
Remember, not all insurance policies are created equal. Finding the right type of coverage is important to help mitigate risk and succeed with your vacation rental business.
You need the right insurance.
That’s why we created InsuraGuest, an insurtech company that offers the right insurance, for the right uses, at the right time, using the right technology, at the right price.
Why vacation rental insurance
Let’s start by exploring why vacation rental insurance is needed in the first place. Afterall, most properties are already covered by some type of homeowner’s insurance policy, right? Well, yes and no actually. It depends.
Most vacation rental properties are used for personal and business purposes. Owners often use their vacation properties personally by allowing family members to stay in them, then list the property as a short-term vacation rental when not in use by the owner. Then there are times when the property is unoccupied altogether.
This means there are multiple uses of the property — leaving big gaps in insurance coverage since most policies are written for one use or another but not all uses collectively at the same time.
What is needed is an insurance policy that is specifically and exclusively written for vacation rental properties with the right types of coverage and protection.
The right insurance coverage
General Liability Insurance for Vacation Rental Properties
The biggest exposure you have as an owner of a vacation rental property is general liability. When you invite guests into your short-term rental property, you inherently open yourself up to liability risk.
For example, what would happen if a guest sustained and injury at your property during their stay and you were found liable for that injury? What if one of your guests slipped and fell, or cut themselves on a sharp object, or experienced an unexpected event that resulted in broken bones or stitches? Or what if something even worse happened that resulted in a serious injury or fatality which in turn resulted significant medical costs for your guests?
Many vacation rental property owners assume their homeowner’s insurance policy will cover these risks. Not so. Other owners seem to ignore the issue altogether hoping nothing serious will happen or they fail to notify their homeowner’s insurance company that the property is being rented out.
We see it all the time.
An entrepreneur acquires a vacation rental property and decides to list it online. They avoid notifying their insurance provider so their rates don’t go up, hoping to ‘fly under the radar’ as it were. Guests arrive and, for a time, everything works out great.
Then the inevitable happens. Someone gets hurt, they make a trip to the doctor’s office, and incur medical expenses. Thinking their health insurance policy will cover these expenses they report the incident but are denied coverage. Why is it denied? Because the injury occurred at a vacation rental property which is considered a business.
When an injury occurs at a business it falls under a different legal framework and many times the business itself is liable, particularly if the property owner is at fault. The type of insurance designed to cover such risks would be a commercial liability policy, not a typical homeowner’s policy.
When health insurance providers deny the claim, no compensation for medical costs are paid out, and the guests are left frustrated with no other option than to hire an attorney. The attorney files a lawsuit against the vacation rental owner for the maximum amount allowed by law and the property owner is not only faced with exorbitant legal fees but formidable medical expenses as well.
All because the property owner didn’t have the right type of insurance coverage for their short-term vacation rental property or understand the inherent risks.
Having the right insurance coverage for your vacation rental means having a general liability policy in place that is written specifically for the vacation rental industry, property owners and managers, and their guests, not just a typical homeowner’s or landlord policy.
$25,000 Accidental Primary No-fault Medical Insurance
Medical insurance for guests
When a guest is accidentally injured on a vacation rental property during a stay, InsuraGuest protects property owners by paying out up to $25,000 per accident regardless of who is found at fault. This is the largest payout of its kind in the vacation rental industry.
This additional layer of protection ensures quick claim payouts after an accident and reduces the number of lawsuits for minor injuries since guests are less likely to hire an attorney when minor injuries are handled in a quick and professional manner.
The term “primary” means claims are filed with us first rather than against your general liability policy regardless of which GL policy or provider you have in place. What this means to a property owner is reduced claims to your GL policy, lower premiums and deductibles, overall savings to bottom-line expenses, and higher profit margins.
Examples of instances covered by InsuraGuest medical insurance:- A guest slips in the shower or at the pool and incurs medical costs for a broken bone
- An accidental injury of a guest occurs while children are playing on premise
- A guest needs stitches due to an accident involving broken glass
$25,000 Property and Contents Damage Insurance
Property damage insurance for owners
Most vacation rental property owners charge a security deposit to cover property damage. But setting and managing a security deposit is difficult and challenging at best, not to mention most vacationers hate paying deposits.
Most owners are unsure of how much to charge. Some charge a percentage of the total transaction, others pick a flat rate, creating confusion and disparity. Not to mention it’s nearly impossible to collect for damages exceeding the original deposit. It’s a negative trend which often results in poor guest experiences, bad reviews, and fewer guest bookings, which is why an increasing number of owners are choosing to not bother with deposits at all.
With InsuraGuest Property Damage Protection you’re covered up to $25,000 per stay with compensation benefits for property damage caused by your guests during their stay. Whether it’s broken glass, a mishap with an appliance, or a wine stain on the carpet, we’ve got you covered.
Why hassle with cumbersome security deposits and compromise positive guest experiences when you’re covered for property and contents? No matter whether the damage is accidental or intentional, your property is covered.
Examples of instances covered by InsuraGuest property insurance:
- Guests damage your vacation rental home or property during a stay
- Guests damage property contents such as appliances or furnishings during a stay
$2,500 Theft Insurance
Theft insurance for vacation rentals
Like it or not, when you own and rent out your home as a vacation rental property you will likely encounter issues involving theft at some time or another. When that happens it’s best to make sure you and your guests are protected with theft insurance.
InsuraGuest covers up to $2,500 for stolen items when guests stay in your property. If items turn up missing after a guest stay, InsuraGuest pays out quickly to cover those losses. If your guests’ property is stolen during their stay, we’ll pay the claim so you don’t have to worry.
Examples of instances covered by InsuraGuest theft insurance:
- Guests’ belongings are stolen from the property while they are renting your property
- An owner’s property or furnishings are taken from the property by guests during a stay
The right uses
Let’s explore the different uses you may choose for your vacation rental property and examine which types of policies offer coverage for each of these uses.
Personally occupied: personal use of your vacation rental property as a homeowner
Homeowners insurance is designed for owner-occupied properties, whereas a landlord policy is designed for tenant-occupied properties.
When you or your family stays in your vacation rental property, a typical homeowner’s policy will generally suffice for most eventualities. If property damage occurred while you or your family were staying in the property, your homeowner’s policy would likely cover damage repair costs.
However, homeowner’s policies generally exclude commercial activity, so the moment your property is rented to a guest, the homeowner’s policy is no longer sufficient to cover your risks. It’s when you decide to rent the property to a guest that changes the nature of your protections.
Guest occupied: commercial use of your vacation rental property as a landlord
Once you decide to rent your short-term vacation rental property to guests, a whole host of considerations immediately come into play.
- What happens if a guest is injured or does damage to my property during their stay?
- What are the legal restrictions for short-term vacation rentals in your area?
- Which business licenses and occupancy permits are required and what zoning laws apply?
- Does your property meet health and safety requirements such as smoke detectors and fire extinguishers and are they up to code?
All it takes is a guest injury, neglected property maintenance, a nuisance complaint, or a disgruntled neighbor to trigger a cease-and-desist order from the city to turn your vacation rental property dream into a nightmare.
Most homeowner’s policies see vacation rental properties as high-risk coverage due to the heavy traffic, complexity of uses, and added exposure, so coverage to short-term rental properties is often excluded and claims are denied because they are outside the scope of the typical policy.
Unoccupied: vacant, neither personal nor guest use
Regardless of whether your vacation rental property is rented to a guest on a short-term basis or whether you and your family are staying there, eventually the property is likely to be unoccupied. But what happens in the case of vandalism, theft, or unforeseen occurrences such as a broken water pipe?
InsuraGuest has the coverage and protections you need as a vacation rental property owner or manager.
For any of these uses InsuraGuest offers the most optimal coverage so no matter how and when you choose to use your vacation rental property, you’re covered under our policy because we designed it specifically for the vacation rental space.
The right time
Imagine having to think about and manage insurance protection every time your vacation rental property is occupied and make sure you have coverage for all occasions as they change from day to day. It would be impossible. Most vacation rental property owners pick a policy and hope for the best, not having full confidence of knowing they are covered in every situation.
With InsuraGuest, coverage is automatically applied at the exact time of check-in and check-out, so you only pay for the insurance you need, only when you need it!
Having the right insurance at the right time for the right occasion is the key to owning and managing a vacation rental business and InsuraGuest makes that possible through advanced technology.
The right technology
InsuraGuest is the first of its kind. We are an insurtech company that has invested in and built the most robust insurance delivery technology in the vacation rental industry and we’ve made it incredibly simple and easy to use.
We have already integrated with the top property management systems in the industry, so chances are you are already using a PMS we are integrated with and have immediate access to our insurance. The best part is all you need to do is to log into your PMS and switch on InsuraGuest. We’ll take it from there. In most cases it’s as easy as clicking a button and choosing a few settings.
Our technology automatically applies InsuraGuest coverage to every guest stay at the exact time of check-in and check-out, so you never need to worry about whether you are protected.
The right price
The average cost for most vacation rental insurance is at least 2 to 3 times higher than a typical homeowner’s policy. In the United States for example, vacation rental insurance can vary from around $1,500 to $3,500 or more annually depending on several factors.
InsuraGuest coverage starts at $4.95 per night depending on the number of properties you enroll. And you can add an amount on top of that charge as part of our revenue share program so your insurance costs can decrease while your profits increase.
With InsuraGuest, you can opt to pass along insurance costs directly to your guests at the time of booking. This one factor alone could mean the difference between a highly profitable vacation rental business and a mediocre bottom line. So why wait? Get started with InsuraGuest today.