Shifts in the housing market have set the vacation retal industry to grow to more than $120 billion by 2032. Market growth has made vacation rental insurance coverage a crucial part of property management.
Both premises liabilities and potential damage from guests can cost money. Good insurance policies protect you when something goes wrong in your rental. You'll want to make sure the rental price for your new vacation rental covers the cost of insurance as well.
If you've entered the vacation rental market as part of the recent growth period, you may not know what to look for. Read on for more information on rental property protection options.
Vacation Rental Insurance Coverage Basics
Short-term rental coverage has three broad types of costs it should cover. A good insurance policy will cover all of these, and you should read your policy to check what it covers.
Guest Liability Coverage
The greatest nightmares that can visit a hospitality owner fall under commercial liability. Premises liability case law states that an owner bears responsibility for things that happen on the property and has a duty to keep the premises safe for those who visit. That rickety stair to the basement might not bother you, but a guest who falls down the stairs and breaks a leg could sue you for thousands or millions of dollars.
Guest liability insurance policies will pay out when a guest receives such an injury. While you hope you'll never need it, you'll sleep easier if you know you have it.
Income Protection
In Florida, hurricanes threaten property often. If you lost the ability to list your vacation rental on the market for five months due to hurricane damage, you'd find yourself in a difficult position.
Good rental property protection protects you from interruptions in income. You need the time, space, and resources to focus on repairing the unit after disasters rather than worrying about where your next check will come from, and income protection provides that.
Property Damage
Property damage insurance for rentals works much the same way it does for personal homes. In the event your building or its contents receive significant damage, your insurance policy will pay out.
Reasons for Higher Costs
Vacation rental insurance coverage costs more than similar policies for personal homes. Vacation rentals sit vacant more often, and a vacant home presents risks that an occupied home doesn't. Costs can vary, but you should expect to pay two to three times the insurance cost for a similar personal home.
Peace of Mind
Appropriate vacation rental insurance coverage will protect you from many potential problems such a rental can face. Your investment should make you money rather than turn into a money sink, and a good policy will cover the most common big expenses.
At PMI Metro Lakes, we bring more than two decades of experience with the property market to our handling of vacation rentals. Our comprehensive services include:
- marketing
- finding reliable housekeeping and maintenance services
- check-in management
If you have a property you want to rent, contact us for a free consultation, and we'll help you find the best solutions for you.
