Contrary to popular belief, there is a HUGE difference between Pay-As-You-Go Damage Insurance and Commercial Vacation Rental Insurance. Learn the key differences today in this week's blog!
If you rent your vacation property to others, there is always a risk that the structure or its contents will be damaged somehow during a renter’s stay.
When damage occurs, you could find yourself having to pay significant amounts of money to repair or replace your property. That’s where vacation rental insurance comes in. Of course, there is a cost to purchasing insurance coverage.In an attempt to cut expenses, some property owners consider requiring renters to buy their own “pay-as-you-go” vacation insurance policies or ask for large, up-front damage deposits, rather than purchasing commercial vacation rental coverage designed for property owners and managers. This type of cost shifting can be appealing. However, relying on renter-purchased coverage rather than buying your own commercial policy could actually backfire.
Potential renters may be wary of booking your vacation rental because of the added cost they will need to incur to do so. When facing a choice between two vacation rentals where one requires renters to buy insurance and the other does not, renters may choose the less expensive option.
In addition, taking the pay-as-you-go approach could leave you without the funds needed to fix your property when losses occur. Pay-as-you-go damage insurance is marketed as insurance protection that can keep vacationers from having to forfeit their security deposits if they are responsible for accidental property damage while staying at your rental. When the vacationer purchases the policy as the insured party, any damage claims will be paid out to them, not you, unless they assign benefit payments to you. Policy benefits can also be limited and may come with multiple exclusions. This may leave you without adequate insurance protection – even when renters do assign their policy benefits to you.
To learn more about why you need vacation rental insurance designed specifically to meet the needs and risks every vacation rental property owner faces, contact CBIZ Vacation Rental Insurance today at 888-883-5696, or get a quote online in just minutes.
Now that you know the differences between commercial vacation rental insurance and pay-as-you-go damage insurance, you're probably wondering what about host liability policies?
Get the answers here.