What to Know When Getting Your Vacation Home Insured

Did you know? An estimated 600,000 homeowners in the United States earn extra income by renting out their homes on a short-term basis. 

Many vacation-rental business owners believe they can rely on their standard homeowners or landlord policy for protection. While these policies provide property and liability coverage, they typically exclude business activities, which means liability claims arising from rental activity will most likely be denied. So what's a property owner to do when it comes to insuring their vacation homes? Fortunately, you have options.

Vacation Home Insurance Options to Know

The insurance industry offers options that range from liability-only coverage through online-booking sites to comprehensive property and commercial general-liability coverage. But with several options available, it can be difficult to know which option is best.

"If you don’t buy insurance for your vacation-rental property, you’re not a business person, you’re just playing games."
-Hospitality expert Anthony Melchiorri

When choosing insurance for your short-term vacation rental, make sure coverage is available and appropriate for the exposure. Some policies won’t cover the risks associated with home-sharing, for example, but are ideal for whole-house, short-term rentals.

As a Place of Business, Your Vacation Home Requires Commercial Insurance

Keep in mind that as soon as a home is advertised as a vacation rental, the home becomes a place of business, and the risk to the property and exposure to liability claims substantially changes. At minimum, a vacation rental should be protected by an insurance policy that includes property coverage and commercial general liability (CGL), as well as business-income coverage. CGL insurance provides protection against claims arising from your business operations, as well as advertising and personal-injury liability. Business income coverage provides financial relief while your property is being restored after a covered loss.

What is the Best Choice for Vacation Home Insurance?

Purchasing vacation home insurance designed specifically for short-term rentals can give you the insurance protection you need, covering both property damage and liability risks. Ideally, you want a policy that includes commercial general liability, property damage coverage and business income protection so that all of your bases are covered and you leave nothing to chance. Renting out your vacation home is, after all, a business investment. It is in your best interest to insure it like one. 

Find out more about how CBIZ Vacation Rental Insurance can protect you from the risks you face when renting your property. Request a free quote today!

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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