Homeowners Ins or Vacation Rental Homeowners Insurance
They both protect your vacation home equally or do they?
The recent fires that California is experiencing has brought to the forefront the importance of having the correct homeowner’s insurance policy to cover damage and loss of rent for your vacation rental.
Large domestic homeowner Insurance policies have either inadequate or even improper coverage for vacation rental homes. Many of the large domestic Insurance companies have not adapted their policies to accommodate correctly the growing vacation rental market segment and are currently scrambling to do so but in the meantime homeowners vacation rental properties maybe inadequately covered.
At NomadnessRentals we want to make sure our homeowners have the correct, best-suited homeowner’s insurance policy for their vacation rental. A policy that protects your investment not only the damage but also the loss of income.
Buying homeowners insurance for your vacation rental consider these 3 points.
1. Liability coverage of $1,000,000 per occurrence with a $2,000,000 aggregate for commercial liability insurance and the reason you would need “commercial” insurance is that if you are renting out your property and conducting business therefor a “commercial” policy is what you should have. Large domestic insurers are denying claims: See claims denial lawsuit. Regardless of what you hear or read, the reality is homeowners and landlord insurance is not designed for short-term vacation rentals. In defense of domestic insurers, home insurance, and landlord insurance is designed to be the owner or long-term tenant occupied and their underwriting and pricing reflect this. Without commercial insurance, you are open to massive gaps in insurance or/either a flat claims denial.
2. Full business income coverage. This clause protects you in the event your unit is unavailable for rent due to damage. Your loss of rent would be covered while the property was being repaired.
3. Many Insurance companies have a “no exclusions” as their way around the lack of language for a vacation rental but this can work against you and gives the claims adjustor an opportunity to deny the claim especially if there is business or rental activity. Your insurance policy needs to have language specific to vacation rentals so that you are properly covered. Think this might not happen to you if you just have “no exclusion’ language? Click to read this lawsuit with Travelers as a result of “no exclusion” language.
If your insurance company can’t accommodate these 3 points and you need help finding a different company gives us a call (888)472-5777 or email (firstname.lastname@example.org) and we can recommend a company that can provide the proper coverage to replace your current policy.