Whether you’re looking for fun in the sun at the beach or a relaxing mountain getaway, renting a vacation home can be an affordable and convenient option. These properties often provide all the amenities and privacy you enjoy at home, while allowing you to explore and enjoy your vacation destination. However, even on vacation, accidents can happen. Do you need insurance for your vacation rental?
Vacation Rental – Do You Need Insurance?
While a vacation home comes with the amenities of home, it also carries similar risks. You could damage the property, causing anything from minor cosmetic damage to total devastation. Your belongings could be stolen or damaged. Or you, your family, or a guest on the property could become injured. In some of these cases, you may be liable for the damage, making insurance coverage a valuable asset.
1. What Does Your Existing Homeowners Insurance Policy Cover?
Most homeowners and renters insurance policies cover damage both on- and off-premises. This means your camera, laptop, clothing, and other items will be covered in your vacation home. (They may not be covered on the road; check your policy, as well as your auto insurance policy, for details on coverage in transit.) If your items are stolen or damaged, you can submit a claim to your insurance company and receive reimbursement according to your policy terms. It can be useful to inventory the items you are taking with you, to facilitate filing a claim if necessary.
However, while your items are probably covered, off-premises coverage typically has much lower limits than on-premises coverage. If your homeowner’s policy covers $100,000 in property damage, it may only cover 10%, or $10,000, when you take your belongings off-premises.
The liability coverage in your homeowners policy also applies to situations other than at just your home. While it may not cover a situation such as an accidental hole in the rental property’s wall, if you set fire to the home while grilling, it may be covered. Your insurance agent can help you understand your specific coverage. If you have umbrella insurance, your coverage may be extended to cover more situations.
2. Is There Already Homeowners Insurance in Place at the Rental Location?
Vacation rental homes are typically insured by the owner/operator of the rental with homeowners insurance specifically designed for rental properties. This coverage should pay for damages due to fire, storms, and other hazards, so you are not responsible for these costs if the home is damaged during your stay. Similarly, they will have liability coverage for injuries caused by the owner’s negligence.
It’s always a good idea to ask what kind of insurance coverage the property owner has, and what your obligations will be for any damages that happen during your stay. You may need to put down a refundable security deposit, depending on the owner’s policies for rental.