5 Vacation Rental Insurance Myths Debunked

Posted by Hannah Lapin on Jun 14, 2019 9:00:00 AM

2 people at a desk with a calculator looking at insurance papers

The vacation rental market is booming in the United States. In fact, according to BuildUp, 30% of vacation property owners plan to rent their vacation homes out as short-term rentals. While vacation rentals are a great investment, it is extremely important to have adequate insurance before renting out your property. Here are five vacation rental insurance myths debunked:

  1. My homeowner’s insurance will cover my vacation rental.

    If you rent your vacation property out more than 90% of the year, homeowner’s insurance will NOT cover your property, since it is considered a business. Even if you rent out your home less than 90% of the year, you should still check with your insurance provider to make sure you are covered.
  2. My vacation rental insurance policy covers guest belongings.

    Actually, vacation rental insurance does NOT cover guests’ belongings. Maintenance and repairs are also not covered. 
  3. My Water Damage Policy covers flooding for my vacation rental.

    Be careful of this one! If your rental property is in a flood zone or an area prone to flooding, you are going to need Flood Insurance coverage, which is separate from a Water Damage Policy.
  4. My liability coverage covers construction-related injuries, even when I am the contractor.

    This is a common myth! If you are a contractor making your own repairs to you vacation rental, landlord liability insurance will NOT kick in.
  5. My vacation rental insurance policy will cover my income if I am unable to rent out my property due to damage.

    While many vacation rental insurance policies include Loss of Rent Coverage, not all of them do. Check with your insurance provider to see if you have this coverage, and if not consider including one.

We always recommend due diligence when looking for a vacation rental policy. Learn more about landlord insurance from our Resources Page.

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Related: What to Look for in a Vacation Rental Insurance Policy, 2019 Vacation Rental Market Quiz

Topics: Insurance