While short-term rental properties can be an attractive way to generate income, investors frequently face a dilemma when it comes to handling insurance issues.
For example, what would happen if a guest stole a precious art collection, “borrowed” your brand new big screen TV, or had a slip and fall and decided to sue you for negligence? Would your current insurance policy protect you in case of a liability suit?
Situations like these can be all too real for real estate investors, but fortunately, there are insurance policies specifically designed to cover the risks of short-term rental properties.
This article will delve deeper into the meaning of short-term rental insurance, how it works, why you need it, and some of the best insurers you can use.
Looking to protect yourself and your investment? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Short-term rental insurance covers individuals renting their property or a part of it on a short-term basis. For instance, staying in a cozy, homey place with great amenities when traveling has become a popular alternative to boring and expensive hotel rooms.
Online rental platforms like Airbnb, have made it possible for property owners (known as hosts) to turn their second homes into short-term vacation rentals by renting them out for shorter periods like days or weeks.
Short-term rental insurance comes in handy when there are damages to your dwelling, including fixtures and fittings, stolen items, loss of income when the property is uninhabitable, and a liability claim due to injuries sustained due to negligence on your part.
Depending on the insurance carrier, there may also be optional coverage for situations such as excessive use of utilities and liquor liability coverage. Coverage in the event a short-term renter consumes alcohol you had on the premises and is injured. Some insurers might even cover damages from identity theft, i.e., when someone steals your identity and uses it to access your online rental accounts.
Short-term rental insurance coverage can stand alone. However, some insurers might offer it as a rider or endorsement of your current homeowners or an existing landlord policy.
Many individuals entering the short-term rental business assume that their existing homeowners insurance policy is enough, until they have a rowdy guest for a weekend and are left with broken furniture or other personal property or damage to the property's structure and a hefty bill.
Turning your home into a short-term rental unit makes it a business venture. Homeowners policies only apply where the landlord is not collecting income from anyone residing on the property.
On the other hand, landlord insurance covers real estate investors with long-term tenants (i.e. those who stay a year or more).
As you can see, both homeowners and landlord insurance coverages are meant for specific niches, long-term real estate investors, and owner-occupied properties. This, of course, leaves a gap for investors in the short-term rental business.
If any damages happened to your property or an injured guest sued you for negligence, it is likely neither of these insurance options would cover these expenses. That's where short-term landlord insurance comes in— to offer you protection in the case of damage caused by short-term stay guests.
With any type of insurance coverage, it is crucial to have the right insurance company watching your back. You certainly don't want to be faced with debt from having to make repairs to your rental property or replacing personal belongings within it because you didn’t have the right insurance policy with the right insurance company.
Here is a list of the 10 best short-term rental insurers for you to consider:
Finding the right insurer is not an easy task. One option is to work with your existing insurance agent, but that can take a lot of time, and it is difficult to compare different short-term rental insurance policies side by side.
A better way to shop for landlord insurance for a short-term rental property is using an online resource like Obie.
Obie allows you to obtain insurance for your short-term rental property quickly and easily, ideal for real estate investors and landlords. You won't have to waste hours attempting to figure everything out yourself since Obie's simple quote request process will match you with the right insurance for your short-term rental.
Enter the property address and get an instant quote online for landlord insurance. Coverage is available in all 50 states, and investors have insured more than $4 billion in property with Obie to date.
Obie gives landlords and investors complete insight into the insurance procedure, saving them time and money. Consider switching if you already have landlord insurance with another provider. Obie clients typically save 25% compared to their prior carrier!
You may feel the urge to shop around for the best insurance. One way you can do so, and spend less time is using a service that compares quotes for you, like Obie. Go here to get an instant quote today.
Allstate Insurance offers comprehensive protection for landlords with short-term and vacation rental property, whether you're renting out a condo, townhouse, or house. Allstate's Short-Term Rental Property Insurance covers liability, property damage, loss of income, and more. And if you have any damage from a hurricane, tornado, or another natural disaster, Allstate will cover it as well.
American Family Insurance offers a variety of landlord insurance options for those with vacation rental property. They have an extensive list of covered perils, including damage from weather events, fire, theft, and vandalism. In addition, they offer coverage for loss of rent due to a covered event. This is important coverage for landlords, as it can help offset the cost of repairs if your property is damaged and can’t be rented out for a time.
American Family Insurance also offers convenient online tools, such as a Vacation Rental Property Calculator, that can help you determine the amount of coverage you need. Landlords with vacation rental property should consider American Family Insurance when shopping for landlord insurance.
As a landlord, you know that safeguarding your property is key to maintaining a successful business. American Modern gives investors the peace of mind that comes with knowing your property is appropriately protected. The company offers insurance solutions tailored specifically for short-term and vacation rental property landlords. Comprehensive policies cover everything from damage caused by tenants to loss of income due to unoccupied units.
CBIZ has years of experience insuring vacation rental properties, so the company knows what it takes to protect your investment. Short-term rental policies are designed to cover all potential risks of renting out your property, including damage to the property itself, liability for injuries that occur on the premises, and loss of income if your property is uninhabitable due to a covered event. In addition, CBIZ offers 24/7 claim reporting and will work with you to help get your property repaired or replaced as quickly as possible.
Farmers Insurance can be a good choice for insuring vacation rental property for several reasons. First, they have a long history of insuring rental property, so they understand the unique risks of this type of property. They also offer a variety of coverage options that can be tailored to the specific needs of your rental property. In addition, Farmers offers competitive rates and discounts for landlords with multiple properties. Lastly, their customer service has an excellent reputation, and they are always available to answer any questions you may have about your policy.
Foremost (a Farmers Insurance Company) has over 50 years of experience insuring vacant and tenant-occupied properties, and their team of experts understands the unique risks associated with short-term rentals. The company is well known for its industry-leading coverage and claims process, which makes it a great option to consider for those with rental property. In addition, Foremost offers many discounts for landlords who insure multiple properties or who have their property professionally managed.
Nationwide offers comprehensive protection for landlords with short-term and vacation rental property. They are a well-respected company with a long history of providing quality coverage. Their policies are designed to protect your investment and give you peace of mind. They offer competitive rates and flexible payment options. You can customize your policy to fit your specific needs. They also have 24/7 customer service and a team of professional agents who are always ready to help.
As a landlord, you understand the importance of insuring your property. But when it comes to short-term and vacation rentals, you need coverage specifically designed for this type of property. That's where Progressive Insurance comes in. The company offers comprehensive protection for landlords with short-term rentals, including coverage for damages caused by tenants and third-party guests. In addition, policies include liability protection if a tenant or guest is injured on your property.
While there are many different insurance options available, Proper Insurance offers a unique combination of features that may make it ideal for landlords. For starters, the company offers flexible coverage options that can be customized to meet your specific needs. Additionally, Proper has a team of experienced underwriters familiar with the risks associated with short-term rentals and can offer competitive rates and comprehensive coverage.
Investing in short-term rentals can be an excellent way to maximize returns on your properties. But like any other real estate investment, it is crucial to get the right insurance.
In most cases, your landlord or homeowners insurance policies will not cover any damages when guests stay for short periods. Luckily, short-term insurance policies are available for this niche. Numerous insurers have made it easier to manage your short-term rental insurance needs online. The above list is not exhaustive but provides some of the best insurers to consider.