Why Do I Need Vacation Rental Insurance?

Not All Policies Are Created Equal

When it comes to vacation rental insurance, only comprehensive coverage will do. CBIZ Vacation Rental Insurance covers you for all of your renters’ stays, regardless of how those stays were booked and without the lengthy list of exclusions. It includes replacement cost coverage for your building and its contents, coverage for additional structures, and protection for sewer and drain backups. The CBIZ Vacation Rental Insurance program can also include coverage for medical expenses, the cost of defending the policyholder against lawsuits and more.

Relying on anything other than comprehensive coverage for your vacation rental property “is just playing games” according to hospitality expert and Travel Channel’s TV Host, Anthony Melchorri.

Homeowners Insurance

You can’t rely on your homeowners insurance to do what only a vacation rental policy can. Why? Because renting out your home for short-term stays is considered a business activity, and business activities are excluded from most homeowners insurance coverage.

Without commercial general liability coverage, which is the best option for running a vacation rental business, you might be forced to foot the bill if someone is injured during their stay or they cause damage to your property. Homeowners insurance simply isn’t designed to cover these types of risks.

Website Host Liability Policies

1. Vacation rental listing websites such as Airbnb and Vrbo as well as other home-sharing platforms typically offer peace of mind with free or low-cost host liability policies. But you can’t rely exclusively on these either. Many of these policies are free or low-cost for a reason – they’re riddled with fine-print exclusions that leave you exposed to risks you’d never have imagined.
   
   For example, host liability policies generally limit coverage to personal and legal liability while excluding or limiting coverage for property damage. While a host liability policy may cover you if someone holds you accountable for their injuries, your home and its contents may still be left unprotected.

Pay-as-You-Go Insurance

1. Another coverage option you may have encountered is pay-as-you-go insurance. Pay-as-you-go insurance gives you coverage only for the nights you have renters, which means you only pay per night of coverage. While this type of policy may seem attractive, especially to homeowners who only rent their spaces a handful of times a year, other issues could arise.
   
   For one, you could be facing gaps in coverage in between tenants. If something were to happen to your property while vacant (such as an electrical fire or a burst pipe), you might be forced to pay out of pocket for the damages.
   
   As your vacation rental business grows, you’ll also discover that pay-as-you-go coverage will not be as cost-effective as having comprehensive coverage for the entire year. Generally, the total cost of an annual vacation rental insurance policy is much less overall.