Vacation Rental Nightmares

Lighten Up! The RV Checklist of what Not to Pack

Whether you are renting a vacation home in San Francisco or one near South Padre Island, you will want to avoid any vacation rental nightmares.

It’s vacation time, and the whole extended family is renting a vacation home near the beach. Three people might be cooking dinner, and each of the three thinks the other two are watching the frying pan on the stove. In minutes, flames are shooting up out of the pan, scorching the walls and producing a good amount of smoke.

Thankfully the fire is caught and put out before the whole vacation rentl burns down, but the damage is more than obvious. Clean up and repair work will be costly, and the house’s proprietor will not find this at all humorous. Everyone knows that an insurance company will have to get involved– but whose?

Offering vacation rental homes is increasingly popular and easier than ever thanks to services like Air BNB. There are however risks for both the owner and the renter.

These include:

• One of the renters might be injured by an unsafe condition in the house
• A friend or family member visiting the renters for the day might be injured on the premises
• The renter might damage the building
• The renters could unintentionally damage a neighboring house or injure someone staying there.

While Homeowners insurance policies are not exactly the same, nearly all provide Personal Liability Coverage. Most policies will cover fire, explosion or smoke damage to premises rented to or occupied by individuals insured, but not other types of damage.

The vacation rental’s home owner may have legal responsibility for a condition in the house that injures a renter or visitor. If so, the owner’s liability insurance should cover related costs and medical expenses. It is wise to have an umbrella policy as this type of policy may cover gaps that a primary policy may not cover.

Traveling with Expensive Toys and Bling

Your homeowners or renters’ insurance probably has “off premises” coverage. This means that your personal belongings will be covered when you are outdoors- for example, possessions stolen from your car parked outside somewhere or from your vacation house rental.

If you tend to travel with high-priced items, such as jewelry, extravagant sports gear or musical devices, you may wish to consider adding a floater insurance to your homeowners or rental policy. This addition to your policy will cover the cost of particular higher-value items, whether you are at your home or outdoors on a vacation. A floater may also take into account “mysterious disappearance,” which basically means that you might be covered in an event where you honestly misplace your belongings or lose that engagement ring in the sand. (Those guys trolling the beach with metal detectors live for those lost treasures.)

Actual Cash Value, or Replacement Cost

Your belongings will be protected by either an “actual cash value” or “replacement cost” basis. An actual cash value will cover the decreased value that is the depreciated value of the particular item and not what you paid for it initially or what it might cost to replace. On the other hand, replacement cost coverage will cover the cost of replacing the particular item with no depreciation subtracted.

Regardless of type of coverage you have, you will still have to pay your deductible first, which will be out of your own pocket, before insurance kicks in.

It’s best to bring all variables to our attention, or your agent, and discuss strategies on how you can narrow any insurance gaps that may exist in rental situations. Then all that will be left to do is pack the truck, head to the beach, and enjoy the vacation.

Don’t forget the beach ball, and have a great 4th of July weekend!