Since vacation rentals do not strictly fit into any one standard insurance category, it can be challenging to find insurance for short-term rental properties. Most insurance policies are designed to cover owner-occupied properties or second homes that will be used only by the family (or rented out long term). Vacation rentals are rented monthly, weekly, and nightly - so how do you know which is the right insurance to protect your rental? To help shed some light, here are some frequently asked questions regarding vacation rental insurance. As everyone’s circumstances vary, specific questions should be directed to your insurance agent.
Q: Does HomeAway provide or recommend any insurance products for my rentals?
A: HomeAway has partnered with experts in the insurance business to help you equip your vacation rental property with the coverage you need.
For comprehensive coverage, HomeAway has partnered with CBIZ as its preferred vendor for property and casualty products in the U.S. to offer HomeAway Assure™. HomeAway Assure is a CBIZ Insurance Program tailor-made to protect against the specific hazards of your vacation rental business. The policy includes coverage for property and liability. You’ll find the most comprehensive coverage at a good price. You can find more information on HomeAway Assure HERE.
A separate $1,000,000 in liability insurance will be provided for all reservations processed through HomeAway checkout - at no additional cost to you. Learn more here.
Q: Is short term rental of a vacation home considered a business activity?
A: Yes, when you collect money to allow someone to stay at your property for a short period of time, this is a business transaction.
Q: Does a standard homeowner’s policy cover business activities such as a vacation rental?
A: No, a standard homeowner’s insurance policy excludes business activities.
Q: What if my vacation rental is also my primary residence?
A: The HomeAway Assure™ policy insures your home at any time, whether it is occupied by you, unoccupied or rented to others. In addition, the policy provides Loss of Use coverage that pays the additional expenses you incur to temporarily live somewhere else when your home has been damaged by an insured peril.
A separate $1M Liability Insurance is provided to all HomeAway customers by Generali Global Assistance at no additional cost to HomeAway customers. It will only cover a vacation rental stay processed online through HomeAway checkout, however, the coverage is only applicable when your home is being rented out.
Q: What type of liability coverage does a typical homeowner’s policy carry?
A: Personal liability arising from claims of bodily injury or property damage to a third party.
Q: What is the difference between personal liability and commercial liability?
A: Personal liability insurance does not cover business activities, such as charging money for someone to stay at your vacation rental. Personal liability insurance is intended to cover you in the event that a liability claim arises out of the personal use of your property (e.g. a friend or family member is injured on your property and seeks damages). The type of insurance that a business carries and the type most experts will advise that you need for your vacation rental business is commercial liability coverage (business liability). This is because commercial liability is specifically designed for business activities like your vacation rental.
Q: Does a personal umbrella protect over my vacation rental business?
A: A personal umbrella does not provide coverage for business activities. A personal umbrella will follow you anywhere you go in the world, but only for your personal liability. If additional insurance protection is needed to cover your vacation rental business, you should speak with your insurance agent about a commercial excess liability policy.
Q: Can I insure the income my vacation rental business generates?
A: HomeAway Assure™ provides business income protection on an actual loss sustained basis. In the event of a covered loss, your lost business income is covered.
Q: Do I need to purchase additional insurance if my condo is part of an association that has a master insurance policy?
A: A master insurance policy for a condo association covers the common grounds and the exterior walls of the building. You are responsible for insuring the inside of your unit, your personal contents, liability and loss of business income, which is where HomeAway Assure™ comes in as a comprehensive policy to cover you.
A separate $1M Liability Insurance provides $1M coverage per property, per policy year for reservations processed online through HomeAway checkout. Learn more here.
Q: Should I consider purchasing flood, wind damage or hurricane insurance?
A: Since many vacation properties are located near bodies of water like oceans or lakes, the insurance can be a little more expensive because these are considered high-risk areas. Standard policies include coverage for wind damage, although a separate deductible generally applies. Flood and earthquake are not covered under standard policies so you should consider purchasing separate policies if you wish to cover your vacation home against these types of losses. Your insurance agent can help you determine appropriate coverages. If you are purchasing a vacation home, be sure to research this type of insurance before buying because it may affect your final decision on the exact location of your vacation home.
Q: How do you check the financial status of an insurance company?
A: Using sites like www.ambest.com, you can review financial ratings, history of the company, how long they've been in business, etc. Most insurance experts recommend looking for an A-rated company as anything less may not have the financial backing to pay out claims in the event of a large loss.
Q: How can I protect against a traveler causing accidental damage to my property or contents?
A: Most vacation home policies insure against accidental damage by renters, subject to the policy deductible. HomeAway Assure™ provides this coverage.
HomeAway has partnered with Generali Global Assistance to offer Property Damage Protection in the U.S., which is available for purchase by travelers. This coverage could pay the deductible on your primary home policy. There are three options: 1) $59 per booking for $1,500 in coverage, 2) $79 per booking for $3,000 in coverage, and 3) $99 per booking for $5,000 in coverage. Learn more here.
How do I determine the dollar amount I should use for my building coverage?
The building limit should be the cost to rebuild the building not the market value of the property. CBIZ can help you determine the rebuild value of your building using a sophisticated cost per square foot calculator. You can I reach CBIZ Sales here or 888-883-5696.
How do I determine the dollar amount I should use for my contents coverage?
When deciding on the amount of contents coverage you need, determine what it would cost to go out and replace all of your contents tomorrow without the benefit of great sales or bargains and use this figure for your contents limit. Any permanently attached items in your home are considered part of the building coverage and should not be included in your contents. Examples include cabinets, heat/air systems, light fixtures, etc.
I have a swimming pool, do I have coverage?
Yes, Liability Coverage extends to your swimming pool and other amenities such as:
- Hot Tubs
- Non-motorized Watercraft
- Docks & Piers
- Beach Area
- Picnic Area
- Exercise Equipment
- Cross Country Skiing
HomeAway Assure™ can cover the following types of Vacation Rental properties:
- Single Family Homes
**Updated March 7, 2018**