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It is very important that you call your insurance agent and ask about "short term" rentals. I was with State Farm and they told me that they do not cover a house if it is being used as a short term rental. I think you that you think everything is all right, but if a guest files a claim against you, you could be in trouble. Take the time to make one phone call and find out for sure.
ttayloer0 is right when Chub found out we were using our homes as a vacation rental than cancelled us. We had a real problem finding insurance finally went with LLoyds of London at triple the annual premium we were paying. One of our homes actually increased from $5600 to $19,000 which was shocking!
That is really surprising, because I just bought a vacation rental, told State Farm I am planning to Vacation rent my property and they told me that this insurance covers it. I have $1000,000.00 cover for personal liability and I paid just $2000 for my policy. Maybe I should call them again to verify. My management agent is also covered under the same policy, as I had to add her, so they definitely know that this is a vacation rental property. I am getting nervous, I will call again and make sure we are not getting our wire crossed.
You are right to check again, Azzosster. You should do it via email, document clearly that you intend to use for 'short term vacation rentals' and then ask them to check with their underwriters and respond to you in writing. State Farm specifically excluded "Excess Residential Rental Liability" from my umbrella liability policy when I pushed them in writing. Trust nothing your agent tells you verbally until you see it in writing.
We're with State Farm too (over 20 years), and they had no problem setting up the house for vacation rentals. The policy is a personal policy for business use, and covers the building only, not the contents (so we would be out for the cost of furnishings if there was a fire). They could not include it under our personal liabilty umbrella, we had to have a separate rider for that, but it wasn't that expensive. Our agent took care of everything for us (it helps that we're in a tourist region where this is not uncommon) and it came out with a very reasonable price.
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State Farm told me that if I rented the house over 30 days at a time, then they would cover it, but if I rented it short term, (week or so) at a time then they would not cover it. Just thought I would muddy the water just a little bit more. Oh, I went with Lloyds and it was $10 cheaper than state farm for $1,000,000 in liability insurance instead of $300,000 that I had with state farm.
I think it's time to resurrect this conversation. I am struggling to find what I consider to be a reasonable quote for a short term rental condo in So Cal.
State Farm also told me if I rented less than a month at a time they would not cover me.
The only coverage I have been able to find on a short term rental is $1400 a year which compared to what I currently pay is horrendous.
Any advice from anyone?
A policy that covers a short-term rental will definitely be higher than a normal homeowners policy because the risk is higher to them due to the many groups of renters. Try Foremost. Our townhouse is near the Pentagon in Virginia. We paid $1,285 for a policy that gives us $300,000 replacement, $500,000 liability, rental loss coverage, and other various small coverages, $1,000 deductible.
You need commericial liability. On a regular homeowners you only have personal liability. That's for if you do something to someone personally. Like getting in a car wreck. If someone gets hurt at the house they are PAYING you to stay in and they try to sue you, personal liability doesn't cover you. You have to have commercial liability.