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Vacation Rental Damage Insurance - How to Protect your Rental

Vacation Rental Damage Insurance - How to Protect your Rental

Running any kind of business comes with its own risks – and short-term rentals are no exception, especially since it involves letting strangers into your property for days on end. If you decide to rent out your vacation home, you need to make sure that you protect it against unprecedented damages and incidents. After all, things go wrong all the time and even the most well-meaning guests can cause damage or be involved in accidents.

Investing in vacation rental damage insurance is always worthwhile for property managers, as no matter what preventive measures are taken there is always a chance of damages happening. Not to mention the high wear and tear due to large numbers and different types of people using the place.

The only way to make sure that you, your property, and your renters are protected is to take out vacation rental insurance. A specialized policy for short-term rentals can be the difference between a catastrophic loss and an unfortunate but salvageable situation. Find out everything you need to know about getting the right vacation rental damage insurance to protect your rental in this article.

Why Vacation Rental damage insurance is a good investment

A property owner's biggest concern about listing their property as a short-term rental is that the guests will not be as careful with the property as they have been; hence, investing in a good short-term rental damage insurance is a great way to feel relieved while making money.

Other Ways to Reduce the Chances of Damage to the Property

While it is important to invest in short-term rental insurance there are other ways that you can ensure the property is taken care of such as:

1. Guest screening

Using software to screen guests before accepting their request to stay in your property reduces the chances of having troublesome guests that can leave behind nasty surprises.

2. Damage deposits

Collecting damage deposits from guests will make sure guests are careful of how they use your property and will even discourage ill-meaning guests from booking your property.

What about the host protection policies provided by OTAs?

Some OTAs like Airbnb and Vrbo provide policies such as Vrbo’s Accidental Damage Protection policy and Airbnb’s AirCover. While these channels do offer some degree of protection, they may not cover everything you need them to cover. For example, AirCover doesn’t cover damages caused by extreme weather conditions like earthquakes and hurricanes.

What should my vacation rental insurance policy cover?

The extent of the insurance coverage you choose for your vacation rental will vary depending on the type of property you have and its location. It’s important to choose your coverage well: you may not need the most expensive package (though insurance companies will try to sell it to you) but the most basic option may not be enough to cover your needs either.

The three things that every host’s insurance policy should ideally cover are:

1. Property Protection

It is highly unlikely that guests will purposely cause any damage to your rental, but accidents can happen. Make sure that your property and all of its contents are protected by insurance, so you won’t have to dig deep into your pockets if you need to repair or replace something.

2. Liability Coverage

Your insurance should not only protect your property but also eliminate the risk of liability should a guest get hurt or injured while staying at your property. In the rare event that a guest sues you for an accident or injury sustained at your property, you’ll need liability insurance to cover the legal fees.

3. Loss of Income

This aspect of short-term rental insurance is often overlooked even though it’s extremely important. Your insurance policy should provide coverage for a potential loss of income in case, because of some kind of damage, you’re unable to rent your property for a period of time.

Here are a few other things to look out for when choosing your insurance coverage:

  1. If you have valuable furniture, paintings, or other ornaments on your property make sure that your rental is insured against theft.

  2. If your property is located in a coastal area or other location prone to extreme weather conditions or natural disasters, it’s a good idea to take out insurance that covers damages caused by weather-related incidents, too.

In Conclusion:

Homesharing is all about trust – however, as hosts, you do have to deal with the odd guest, and it's best to be prepared for it at all times. While you can minimize the chances of running into such guests by practices such as guest screening and collecting damage deposits, these methods don’t guarantee that you won’t run into troublesome guests. Therefore it is important to invest in vacation rental damage insurance to ensure the smooth sailing of your short-term rental business.

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Rental Managers!