Renting Happiness: Vacation Rentals and Your Insurance

Trusted Choice | July 27, 2012

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. The advantages of rentals are that they can provide more space (which can be important when travelling with a family), they can offer amenities such as kitchens so that you don’t have to go out for every meal and some vacation rentals can deliver more value for the price than traditional hotels and resorts. However, if you’re planning on renting a beach house for the family reunion or a cabin in the mountains to get away for a weekend, there are a few things to consider.

Protecting Your Property and the Landlord’s

While your homeowners or renters insurance policies will generally cover your possessions anywhere in the world, renting a vacation home can expose your property to more risk than staying in a hotel might, since you may be bringing additional belongings such as bedding, cookware, etc. that you wouldn’t normally bring with you “on the road.” Your policy also provides for coverage for property that is “used” by an insured, so that if a television belonging to the landlord is damaged, you would have some coverage; there is $1,000 coverage in homeowner’s policies for an insured damaging someone else’s property.

A standard insurance policy provides for coverage for property damage you may be found liable for, so that if you are grilling outside or cooking in the rented house and you accidentally start a fire that damages the property, you should have coverage. If you are renting a vacation property, check with your Trusted Choice® independent insurance agent about the coverage you have in your homeowners or renters policy when making your plans. Other than the $1,000 mentioned above, the homeowner’s liability coverage only extends to damage resulting from fire, smoke or explosion:

"Property damage" to property rented to, occupied or used by or in the care of an "insured". This exclusion does not apply to "property damage" caused by fire, smoke or explosion;

For example, my wife and I rented a chalet in the mountains for our anniversary. She took a shower in the loft bathroom and the tub curtain wasn’t pulled completely shut. Water leaked through the ceiling into the room below. IF we were liable for this damage, our policy would only cover $1,000.

A personal umbrella policy might provide more coverage. Your Trusted Choice agent can help you obtain an umbrella policy or review an existing one.

Renting Boats

Many vacation rental properties offer additional amenities, and if you’re renting a beach or lakefront property, this may include the use of or ability to rent 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, but usually not for inboard/outboard motor boats over 50 horsepower or sailboats over 26 feet long. Because most inboard/outboard boats, including jet skis, are over 50 horsepower, there may not be coverage in the policy. Physical damage to a boat may only be covered up to $1,500, depending on your homeowners policy, so you may need to find coverage elsewhere if the marina or resort renting the boat to you doesn’t offer coverage.

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, so it’s important to check with your agent about a personal umbrella and whether there would be coverage for watercraft.

Travel Insurance

If you’re taking a vacation you’ll have some major costs that you’ll want to be able to recoup in the event your plans change. For prepaid costs of a trip such as a flight, or the cost of the rental property, travel insurance can cover your loss if the trip is canceled, interrupted or postponed.

A vacation is a time to relax and have fun, and that’s much easier with peace of mind. Discussing your plans with your Trusted Choice agent can give you that peace of mind to have a great vacation.

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