If you plan to rent your vacation home, either short-term to vacationers or long-term to tenants, your basic vacation home insurance policy is not sufficient to give you the coverage you need. You will need a policy specifically for the usage of the home as a short- or long-term rental.
Protect Your Second Home When You Offer Short-Term Rental
Many owners of vacation homes rent them to vacationers when they aren’t using them. This can be a good way to make income from a second home.
If you plan to rent your vacation home on a one-off basis, but do not plan to do so regularly, it is possible that your existing vacation home insurance will allow you to add a short-term endorsement to your policy to cover this.
However, if you choose to rent your vacation home to vacationers regularly, it’s essential that you are insured properly. This means having rental insurance on your vacation home. A rental insurance policy covers your second home for damage, liability, or theft involving short-term renters.
If your vacation home is a condominium or townhouse with a blanket group policy, that policy probably covers liability on the property grounds, but not inside your unit. Insuring against theft or damage inside your rental unit is your responsibility.
Bear in mind that your rental owner’s insurance does not cover a renter’s possessions while they are renting your place. They will need their own renters’ insurance to protect their possessions.
Protect Your Second Home When You Offer
Long-Term Rental
Some second homeowners choose to offer longer-term leases while they are not using the home. For example, the owner of a second home may know that she won’t be using it for at least 18 months and would like a tenant there to help defray costs.
Again, your basic vacation home insurance policy will not cover the insurance necessary for a landlord. For this coverage, you would need landlord insurance.
Landlord insurance covers personal liability and damages. It can replace lost income if the property must be repaired or rebuilt after a loss. And like with rental owner’s insurance, it does not cover the tenant’s personal possessions. The tenant would need to acquire their own renter’s coverage to protect themselves.
Don’t be tempted to skip rental owner’s or landlord insurance if you plan to rent your vacation home in your absence. The costs are low compared to the peace of mind of knowing you are protected.
Insurance agents understand these situations many second homeowners face, and they know what your policy needs to cover if you choose to rent your vacation home to someone.
