Get Better Short-Term Rental Insurance
Short-Term Rental Insurance from Beacon Point
Short-term rentals have risen in popularity in recent years, with Airbnb being the industry leader with 56 million active listings worldwide. Short-term rentals have become a viable alternative to traditional hotels. Travelers may often obtain more services and a more comfortable stay for the same or less money, making them increasingly appealing.
A short-term rental might be a fantastic investment for homeowners. Before you start renting out a part of your home for a vacation rental, however, you should think about how your home insurance views short-term rentals. Because running a short-term rental from your primary residence is generally not covered by your existing homeowners insurance policy because it is seen as a commercial business activity.
Who short-term rental insurance applies to
Short-term rental insurance is only required if you have paying guests in your house; it does not cover family members or friends who are visiting for free. Non-commercial visitors to your home are usually covered by most standard homeowner’s insurance policies.
Short-term rental insurance protects you financially in the case that a paying guest damages your property or causes an accident. For example, if a paying guest is injured and sues you, your short-term rental insurance will help protect you financially. Short-term rental insurance is not intended for year-round rentals to the same tenants. You’ll require a different kind of insurance for that, called landlord insurance.
Short-term rental insurance explained
Short-term rental insurance is available from some insurance companies as an add-on or rider, which means it’s built into your current homeowners policy. Some insurance companies might demand that you get a separate policy to cover your short-term rental, although this may not be the case. This coverage can safeguard your valuables if there is an accident while
You may get short-term rental insurance from your current home insurer if you also currently occupy the home with an endorsement/rider. If you do not live in the home full-time, you will need a dwelling fire policy with the short-term rental coverage endorsed. Give your friends at Beacon Point Insurance a call to help you find alternatives among other house insurance companies to evaluate rates and coverage for your situation.
Hosting as a renter
Short-term rentals are being taken advantage of by a number of people, including homeowners and landlords. If you rent your apartment or home and wish to sublease it as a vacation rental, you should consider your insurance coverage as well, since ultimately you are responsible for the property through your lease. You must first verify your rental agreement to see if your landlord prohibits subletting whether you want to offer the entire unit or just a room.
If you are subletting an entire unit, your landlord’s insurance will likely not cover any damages that occur to the property while you are leasing it. You will need to get your own insurance policy as the short-term rental host. If you are only subletting a room in your apartment or home, you need to check to see if your renters insurance allows for the additional exposure.
If subletting is legal, you should consider extra insurance coverage. If you don’t already have renters insurance, now is the time to get it. You will want to obtain a policy that covers vacation rental activities before inviting paying guests. This additional coverage may be recognized as an endorsement/rider to your current policy or require the purchase of another whole policy.
Companies that offer short-term rental insurance
The first step in purchasing a short-term rental insurance policy is to compare proposals from numerous providers, according to the Insurance Information Institute (Triple-I). Your friends at Beacon Point Insurance can make this process easier by helping you compare the differences between companies in the area your vacation rental is located. This not only enables you to obtain the best price for your plan, but it also allows you to receive the specific coverage that you may want for your situation.
National and regional property insurers that offer short-term rental insurance include:
- Allstate Insurance
- American Modern Insurance
- Foremost Insurance
- Nationwide Insurance
- Progressive Insurance
- Prosper Insurance
- Openly Insurance
- Safeco Insurance
- StateAuto Insurance
- Travelers Insurance
How much does short-term rental cost?
Short-term rental premiums are determined by a number of factors. The location of the property (which city & state), as well as the age and condition of your home, will have an impact. In general, most of the variables that influence your homeowners insurance premium will also apply to a short-term rental policy.
The two most important factors when it comes to renting your home are proximity to fire stations and crime rates in the area. Another factor is your credit history-based insurance score, as well as the materials used to construct your house, according to Beacon Point Insurance. In general, insurance companies will see renting or a part of your property as a risk. Because of this, the premiums for a short-term rental insurance policy will be higher than if you just had homeowners insurance.
Alternative options to protect your vacation rental.
Another option to short-term rental insurance is landlord insurance, which is commonly intended for long-term rentals. Unless you intend to keep the same tenants for an extended amount of time, some insurance providers will not be able to provide you with a landlord insurance policy. Short-term rentals are defined as any rental activity less than 30 days, if you only lease your vacation rental only for 30 days or more, then you can stick with a traditional landlord policy.
Finding an insurance policy that covers both your house and your short-term rental is another alternative. This type of coverage simplifies the procedure and may save you money since the coverage for the rental is more than likely to come from a endorsement/rider rather than a separate policy.
What Airbnb host insurance actually covers
If you rent your property through Airbnb, you are entitled to some automatic protection, although it is not intended to be as comprehensive as a short-term rental policy.
You’re covered by Airbnb’s host protection insurance when you become a host. This coverage includes up to $1 million in primary liability coverage for bodily injury or property damage. It also possibly covers common areas such as building lobbies, which are damaged by your visitors.
Exclusion of property damage caused by environmental factors such as mold, harm or injury from intentional acts, and loss of income is not covered by Airbnb policy. If you wish to make a claim, you must first contact Airbnb, who will then connect you with a third-party claims administrator.
In addition to the insurance coverage, Airbnb’s host guarantee automatically applies to hosts. This covers any damage to your advertised property or belongings up to $1 million, according To Airbnb this is not a form of insurance and they still recommend purchasing extra protection.
A friendly reminder from your friends at Beacon Point Insurance, that you should never count on someone else’s insurance to cover you or your vacation rental property, there is no guarantee it will be there when you need it.
Bottom line: Get Better Insurance with Beacon Point Insurance
As a new business owner with your short-term vacation rental, approach the process as if you’re starting a new company. Whether you want to make some extra money or wish to turn this into a full-time job, you could be doing it for one of these reasons: Regardless, you must take precautions to secure your safety and possessions. If you’re thinking about joining the vacation rental industry, short-term rental insurance is an important element of your financial planning. Call Beacon Point Insurance before determining what the best strategy for coverage is so that you can get better insurance.
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