Note: This is an edited transcript of Christine Karpinski's How To Rent Vacation Properties by Owner
Q: "I am trying to find liability insurance on my second home so that I can rent it out on a short term basis. I have called numerous insurance companies, and no one will offer me coverage. Surely, all of these homes for rent must have liability coverage. What am I doing wrong?"
A: Hi, Catherine. There are probably a couple of things that you are doing wrong when you are talking to insurance companies. First off, I would recommend that you don't go to a traditional captive insurance agent. By that I mean your traditional Met Life, State Farm, Allstate, those types of companies. Often, they just have insurance for those nice "wrap it up with a cute little bow and put it in the perfect package" kind of home. When we rent out our vacation homes, that puts us into a different category. You're going to have to go to independent agents.
The next thing you're going to need to do is to change your vocabulary. When you're talking to agents, the first thing they'll ask is, "Who is your property manager?" If you say, "I don't have a property manager," that's going to shut you off right there. They're going to say, "No, sorry, you have to have a property manager." But that necessarily isn't true in the definition of what we call a property manager. Most often, what they're looking for is somebody who has their feet on the ground who will be checking up on the home periodically. We do have property managers, we just happen to call them something else. They are our housekeepers, our maintenance people, even the snow removal people, or your lawn and landscaping people.
For a more in-depth answer on this, you can listen to the HomeAway podcast on insurance called "Insurance for Vacation Rental Homes, Simplified."
Listen to the original audio version of this podcast.
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