Insuring Your Short Term Rental: From Agema

WHY YOU NEED SPECIAL INSURANCE FOR YOUR SHORT-TERM RENTAL

Most vacation rental owners carry either homeowner’s or landlord insurance policies, both of which have significant coverage gaps. A specialized short-term rental policy is needed due to the fact that the property can be used for commercial short-term rental use, personal use, at times unoccupied, or may have guests for over 30 days. You need an insurance policy that can cover all of these scenarios. Think of this special coverage as a homeowner’s policy, a landlord policy, and a business policy all wrapped into one!

Homeowner’s insurance policies are designed for an owner-occupied property. Without adequate short-term rental insurance, you’re exposing yourself financially to liability and property damage issues that are typically not covered in a homeowner’s policy, due to a “business activity exclusion”. In other words, any claim involving a “business activity” could rightfully be denied.

On the other hand, landlord policies are designed to be used for tenant-occupied properties. Landlord policies also carry a “business activity” exclusion. Here is an example: A renter leases your home for one year. Several months later he/she “slips and falls” in the bathtub because there is soap scum built up on the bottom of the tub. Is this the landlord’s responsibility. No, it’s the tenant’s responsibility to keep their bathtub clean. Now, the same situation. A short-term renter rents your home for a weekend. Now it’s the property owner’s responsibility to keep the tub free of any slip and fall hazards. The short-term renter assumed they were renting a clean and safe property. The liability now falls on the property owner.

Here is a short list of additional coverages that would not be covered unless you have a specialized shortterm rental policy.

• Liability Coverage Extending to Amenities Such as Swimming Pools, Hot Tubs and Bicycles.

• Liability Coverage For Pets, Liquor, Assault & Battery, Abuse, Molestation, and Invasion of Privacy.

• Coverage For damage to Your Building and Contents Caused by a Guest, Including Theft.

• Loss of Rent Coverage

If you want to know if your current insurance will cover you in the event of a loss, contact your agent or broker and simply ask one question. If I regularly rent my property to guests for periods of less than 30 days at a time, will I be covered if one of those guests damages my property or is injured at my property? If you get a “yes”, make sure to follow up and ask for a detailed list of exactly what is excluded.

If you would like a quote or additional information, please email us as contact@agemains.com or give us a call at 913-543-8116.