Do You Need To Buy Vacation Rental Insurance?
When purchasing your vacation rental property it is vital that you fulfill and complete all the necessary obligations. Whether it is taxes or government permits you must acquire and be aware of, there are certain rules and regulations you’ll have to go by. If you don’t comply with the specifics of the region you are purchasing your vacation rental in, then there is a huge chance your accommodation will get shut down, or you could cause complications for your guests. Especially within recent years, governments have been ‘cracking down’ on the short-term rental vacation industry, so it’s really not worth the risk. Airbnb insurance is a very important part of running a vacation rental business and there are many reasons why.
Vacation Rental Insurance Is For Businesses
If you are renting out your Airbnb then it is considered to be a business. You are then entitled to choose a policy and fill out further paperwork to confirm that. Usually, if you own a home then your property can be insured under the homeowner’s insurance policy. But when renting out your accommodation short-term, additional Airbnb insurance is highly imperative. Your insurance provider must be made aware that you plan to rent out your property on a short-term basis. This way you are covered if any mishap or issue occurs in case of a fire, robbery or any type of damage that happens to your property. With some insurance providers you may even be covered in case of an earthquake or major flooding. In this case you are still on the safe side and shouldn’t worry about any extra expenses you should be making.
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What Does Airbnb Insurance Cover?
Generally, all short term rentals insurance policies include three main parts:
The first is if any personal injury occurs to your guests while they are on the premises of your property, then you are covered by your vacation rental insurance.
Secondly, if your property is damaged and not suitable for housing guests, then your policy kicks in and you can be reimbursed for lost short term rental income.
Lastly, everything in your home is insured in the case of any damage. Whether it is a fire, flood or a theft, your Airbnb insurance has you covered.
Importance of Vacation Rental Insurance
While running a business, you can’t afford to deal with extra payments. Short term rentals insurance helps to save you money and to avoid losses. Without insurance, you are in constant potential danger of paying extra expenses and dealing with forthcoming issues. Without insurance, one unfortunate accident can cost you your entire business and is just not worth the risk, ever.
How to Insure Your Airbnb, A Quick Fire Guide
- Schedule a meeting with an insurance company representative
- Collect all the necessary information (i.e. age, size of the dwelling, sprinkler system, type of roof, types of renovations, proximity to nearest firehall, proximity to nearest fire hydrant, if the company will cover your extra amenities like swimming pools and Jacuzzis, etc.)
- Shop around and get at least 3-4 quotes from different companies
- Choose a policy for your property (each policy is different depending on the amount of coverage it provides)
- Sign all the necessary paperwork and ensure that you receive all the important copies, schedule of payments, insurance policy, etc. This is best done before you actually start renting out your property in order to be safe and protected and because you never know what documents may be expected if licensing is required.