For many, renting out your vacation home makes practical and financial sense. After all, as much as you love spending time there, you can't be there all the time.
So, rather than leave it empty, renting it out might be an option to consider. You can bring in some passive income on the side to pay off your mortgage and other bills, and your vacation home won't sit empty and unused.
A win-win, right?
Before you jump into renting out your vacation home, learn how allowing renters may impact your home insurance. That way, you can take the necessary steps to ensure your insurance keeps you protected on all fronts.
What do I need to consider for my vacation home rental?
Once you decide to rent out your vacation home, you might need vacation home insurance to ensure you're covered. Work with a local Trusted Choice Independent Insurance Agent to go through the details and find out what you need to stay protected.
Here are some things to consider before you get started.
1. Location differences
When it comes to making sure your home is adequately insured, location plays a significant role. The things that make a vacation home enjoyable to you, being directly on the beach, for example, could translate into higher insurance costs.
Depending on where your vacation home is, you might want to consider additional insurance such as flood, hurricane, or tornado insurance. This can help you add another layer of protection for your vacation home and potential guests.
2. Rental term
Something else to think about is how long you plan to rent out your vacation home. Do you prefer short-term renters, or will you let long-term renters stay for an entire summer or winter season? Depending on your preference, you may need additional coverage for your home and your guests.
Short-term insurance could help protect you from lost rental income, property damage, or accidental guest injuries. For long-term guests, consider whether you may need renter's insurance to protect the renter's property from theft or damage. These may not be covered under your homeowner's insurance policy.
3. Amenity risks
Your beautiful swimming pool might be the best feature of your vacation home. When your family is there, you enjoy hours cooling off and playing games. There's no doubt your pool will attract the eye of prospective renters, too. However, pools and hot tubs also come with some additional risks — and higher insurance costs.
As you determine whether you want to rent out your vacation home, keep your amenities in mind. In many cases, these may impact your insurance. Speak with your independent insurance agent about the amenities you'll offer to guests and if you'll need additional liability coverage to protect yourself.
4. Type of home
The type of home you have may impact your need for insurance, too. You'll need to consider things like your home or building's age and if your home is single-occupancy, a unit in a multi-family home or a condo. Each of these scenarios may change your policy's cost or require more coverage.
For example, if your vacation home is a condo in the mountains with a homeowner's association, you might have some built-in protection with your condo insurance and HOA fees. In this case, you may not need the same amount of coverage as a stand-alone home on the beach.
5. Home condition
If your vacation home is far away from your primary residence, it may be more difficult for you to check its condition regularly. If you have renters staying in a home that isn't maintained often, it could increase your risk, resulting in higher insurance premiums.
To help combat this and ensure your home is always in good shape, consider hiring a property manager. They can act as your eyes and ears on the ground, immediately taking care of any property damage as well as maintaining the home, amenities, and grounds so everything is in proper working condition.
Make sure you're covered
Vacation home insurance offers another level of protection for both you and your guests. If you're considering renting out your vacation house, it's an option you should explore.
Reach out to your local Trusted Choice Agent to learn more about insurance options for your vacation home rental. They're there to support you, answer all of your questions, and ensure that you get coverage for your vacation home on all of the fronts needed. If you don't have one, you can find an independent insurance agent today.