It is not uncommon for a vacation rental home to be a condominium. Typically, several condominiums share a single building.
How are your renters protected from the moment they set foot on the property through the time they spend in your unit, until they leave the property? They may be covered by different insurance policies depending on exactly where they are.
Furthermore, the losses that you are responsible for covering with your rental home insurance are not the same as the losses that the condominium complex itself must cover. A condo association typically takes responsibility for common areas and grounds, including responsibility for insuring these places.
ROLE OF THE CONDO ASSOCIATION
One reason people like condominiums is that the complex itself takes care of things like mowing, weeding, and common areas including fitness rooms, pools, lobbies, and other shared spaces. All of the areas that the condominium complex cares for must be insured.
WHAT THE CONDO ASSOCIATION’S INSURANCE COVERS
Condo associations have insurance to cover all the shared parts of the complex, often including the roof. In other words, the spaces outside your particular condo are insured by other condo owners or the condo association.
If a tree falls into the condo lobby, it is the condo association’s responsibility to make a claim against their policy. Likewise, if someone is injured in the complex pool, the condo association insurance provides liability coverage.
WHAT YOUR RENTAL HOME INSURANCE COVERS
You are responsible for obtaining homeowners insurance on your individual condominium unit. This includes everything inside your condo unit.
Typically, if it is behind the sheetrock in your condo or outward from there, the condo association insurance covers losses. But the inside of your condo is your responsibility to insure. And that means you need landlord insurance if you plan to use your condo as a vacation rental property.
LIABILITY IN YOUR CONDO
While the condo association’s insurance would include liability coverage if someone were hurt in the pool, lobby, or another common area, if someone is hurt inside your condo, your liability insurance comes into play.
Similarly, if someone slipped and broke their wrist while inside your condo, then you would need to consult with your insurer and possibly make a claim on your homeowners policy.
WHAT COVERS RENTERS WHERE?
When the renter steps out of their car, walks across the grounds, enters the lobby, and walks through the hallway to get to your condo that they are renting, they are covered by the condo association’s insurance.
Once the renter sets foot inside your condo, they are covered by your insurance. They are protected either by your policy or by the condo association’s insurance wherever they may be on the condo complex property.
Insuring a vacation rental condo is similar to insuring any other vacation rental home. But you have to be sure that your insurance coverage meshes with the condo association’s coverage so that your rental guests are covered at all times.
Condo association insurance can make vacation rental home insurance a bit more complex, but insurance agents are trained in navigating these complexities. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com; he’ll be happy to discuss your property and provide you with information on the coverage you need.