How prepared are you for accidents when renting out one of your properties? While you may not expect anything bad to happen while you're away, these things happen. Unfortunately, any injury or damages sustained on your property by renters could leave you open to a lawsuit if you're not prepared.
The best way to avoid financial or legal trouble is with vacation rental insurance coverage. This form of coverage specifically helps you for short-term rentals that involve new tenants frequently moving into your property. While it may be more expensive than regular insurance, you'll enjoy the extra level of security.
Here's why this type of coverage is essential and the different types you can acquire.
Why Vacation Rental Insurance Coverage is Important
Renting out vacation properties is all about offsetting the amount this property costs while you're not using it while also generating some passive income. As such, the last thing you want is to find yourself liable for things like injuries on your property or someone's belongings going missing.
The right kind of insurance specifically covers you in case of these accidents and protects your investment.
Types of Rental Insurance
The kind of coverage you receive will depend on the type of insurance you purchase. Additionally, you may receive some benefits if you rent out your space using services such as Airbnb.
Short-Term Rental Insurance
Landlord insurance is the basic kind you'll want if you're renting out your property for any length of time. However, they only apply to leases that last for six months or longer.
Instead, you'll want to look for short-term rental insurance. This is specifically made for anything under six months.
You can expect coverage for things like fire, theft, vandalism, and wind damage for a higher price than a typical policy.
This type of property insurance applies to only houses rather than apartment buildings. It covers you in case of accidents like a fallen tree or personal injuries. You'll want this regardless of what you plan to do with your property.
However, your insurer may alter your coverage if you plan on renting out the space.
Airbnb Host Insurance
The last type of insurance you may utilize as a vacation rental owner is Airbnb. This marketplace allows people to rent out their property to anyone looking for short-term accommodations.
Airbnb offers host liability insurance that provides you with $1 million in coverage. It protects you if you are personally found responsible for a guest getting injured or losing their belongings.
Protect Yourself from Vacation Renters
Some kind of vacation rental insurance coverage is necessary if you plan on turning your investment property into a source of passive income. Even though short-term rental coverage can be pricey, it's worth it when you're dealing with multiple renters over a longer period of time.
PMI Steamboat provides short-term rental management in the Steamboat Springs area. Our property managers can coordinate bookings, respond to inquiries, manage check-ins, and oversee maintenance on your behalf.
Reach out to us for a free consultation and to learn more about our services.