Whether your vacation rental property is a mountain cottage, a beachfront cabin, or a condo in the midst of a bustling metropolis, you face risks every time you rent it to others.
In addition to the risk of loss you face if a vacationer destroys your furniture or inadvertently creates water damage by leaving a faucet running, you could also be held legally and financially liable if someone is injured on your property.
Some vacation listing sites provide host liability coverage for free or at a reduced cost as part of their service offerings for vacation rental property owners. These types of insurance policies are a good start in managing property owners’ risks. However, relying exclusively on host liability policies could leave you, the property owner, without adequate coverage.
First, host liability coverage may only be available if your property is rented through the listing site’s platform. If you rent to vacationers outside of those channels and you are the subject of a personal injury claim arising from an off-platform rental, the site’s insurer may deny coverage and responsibility.
Host liability policies generally limit coverage to liability only and exclude coverage for property damage. So, while a host liability policy may cover you for certain personal and legal liability claims, your structure and personal property may be left unprotected under this type of coverage.
Vacation rental property owners also sometimes mistakenly assume that host liability policies cover them for any type of personal injury claim or legal lawsuit filed against them as a result of rental activities. The reality is that host liability coverage often comes with lists of exclusions. You could be in for an unpleasant surprise if the insurer denies coverage, finding yourself on the hook financially.
Finally, this type of insurance coverage may not be considered “primary” coverage. This means that if you have another insurance policy that provides liability protection for vacation rental activity, both the host liability policy and your other insurance coverage could share responsibility for covered claims. So, the host liability policy doesn’t eliminate your need to file a claim with your existing insurer.
Purchasing vacation rental insurance designed specifically for vacation property owners can give you the insurance protection you need, covering both property damage and liability risks. Find out more about how CBIZ Vacation Rental Insurance can protect you from the risks you face when renting your property. Request a free quote today!
This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.