Let's Talk About How Your Insurance Covers Summer Vacation Rentals
An increasingly popular vacation idea is to rent a house or an apartment to stay in when you’re away from home instead of a hotel room.
If you’re planning on renting a beach house for a family reunion or a cabin in the mountains to get away for a weekend, here are some insurance-based considerations that should cross your mind.
Advantages of Vacation Rentals
The advantages of rentals are that they:
- Provide more space.
- Offer amenities, like kitchens, so you don’t have to go out for every meal .
- Deliver more value for the price than traditional hotels and resorts.
How Insurance Protects Both Your Personal Property and the Property Owner's Personal Property
Homeowners or renters insurance policies generally cover your possessions anywhere in the world. However, renting a vacation home can expose more property to more risk, so know your policy limits.
That's because you may be bring additional belongings you probably wouldn't for a hotel stay, like:
- Certain electronics
In addition to your property, your policy provides for coverage for property that is “used” by you or anyone else insured by your policy. This means if a television belonging to the landlord is damaged, you would have some coverage.
Be careful though: There is typically a $1,000 coverage limit in homeowners policies for an insured damaging someone else’s property.
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Property Damage Limitations for Vacation Rentals
It's always best to check with your independent insurance agent about the coverage you have in your homeowners or renters policy.
Other than the $1,000 mentioned above, your homeowners liability coverage often only extends to damage resulting from fire, smoke or explosion. This means that if you cause water damage, the policy would only cover $1,000. If the damage was caused by smoke or fire, coverage would be different.
Add Additional Coverage with an Umbrella Policy
A personal umbrella policy might provide more coverage. Umbrella policies basically add more coverage to other policies you already have. Your independent insurance agent can help you obtain an umbrella policy or review an existing one.
Insurance Coverage for Boats and Other Watercraft
If you rent a boat as a part of your vacation, you may have some coverage under your homeowners policy for certain types of watercraft, within limitations.
For example, you probably aren't covered for boats with inboard/outboard motors over 50 horsepower or sailboats over 26 feet long. Because most inboard/outboard boats, including jet skis, are over 50 horsepower, they may not be covered in the policy.
Another thing to consider is that damage to a boat may only be covered up to $1,500, depending on your homeowners policy. This means you should look for coverage elsewhere if the marina or resort renting the boat to you doesn’t offer coverage.
Again, a personal umbrella policy can offer broad coverage to help provide for both liability and property damage, though some umbrella policies will specifically exclude coverage for rented watercraft. Your agent will know all the details about this to help you plan accordingly.
If your plans change, you'll have some major costs you’ll want to recoup. For prepaid costs of a trip, such as your flight or the cost of the rental property, travel insurance can cover your loss if the trip is canceled, interrupted or postponed.
The Bottom Line
A vacation is a time to relax and have fun, and that’s much easier when you have peace of mind. Discussing your plans with your independent insurance agent can give you that and let you have a great vacation.