if i read this right, you are asking if your current hazard policy should include the short term renters?
I always had to disclose that property was being rented to my ins co, as it is higher liability for them, and every company will treat that different. Short term (to ins co) means partying and drinking and much more liability, so yes please have good coverage and make sure they know how it is being used! You may want to consider an umbrella as well if you have significant assets to protect
@Daniel Luedtke I think it's a good idea. There is good value for not a lot of cost.
Things to consider:
Walk your house and do a back of the napkin inventory and cost of all the items in your house. What's the value? Any items with sentimental value?
Some renter's insurance can cover accidents (bath tub overflow damage) and medical/legal (injury or lawsuit)
Renter's insurance is typically less than $200/yr. Consider adding a fee or optimizing rents for seasonality to offset the cost.
Hi @Daniel Luedtke ! Thanks for the post!
I'm by no means an expert in insurance or law, so take what I say with a grain of salt here.
Renters insurance usually applies to the person renting the property, not the landlord. Is this what you are asking about? Usually, the booking company will charge damage insurance (damaged caused by renters) but you could always create your own fee and charge each guest $65-$100 per reservation (mandatory) which will cover YOUR belongings up to $3000 (or something to that effect). You then create your own secondary cash flow after time (this is why insurance companies are so rich, like you said, nothing has happened in 3 years)
You should certainly have liability insurance on your property (no less than $1M) to protect yourself from any potential litigation from guests that trip, fall or hurt themselves while on your property. If you have the property in an LLC then you do have some protection there, but you could still lose your home if something goes south, so I usually recommend a liability umbrella, as that $1M amount has often been seen as the easiest target for attorneys to go after and leave the rest of your personal assets alone. These umbrella policies can usually be added to your normal homeowners policy for just a few hundred dollars a year.
Once again, just my 2 cents and not an expert, if you were referring to some other type of insurance though let us know!
Cheers and best of luck!
@Daniel Luedtke Renters insurance is for the tenant. Your post sounds like you are considering purchasing it. You need homeowner's insurance with a high liability policy in it.
Thank you for all the responses. To clear things up, this is a short term rental, however, I initially purchased it designated as a 2nd home. So I think that is where I may need renters insurance? My regular insurance on the property may not cover any damages that may occur, due to it being a short term rental? Does this make a little more sense?
In all cases it's not a "renters' insurance" you need since you are not a renter.
If you still use it as a secondary home, then you need a Homeowner insurance plus a STR endorsement (or "occasional rental").
If it's used only as STR, then you need a STR insurance.
READ THIS POST.
@Daniel Luedtke you can also add a commercial policy to cover housekeepers, support staff, etc if your management company doesn't cover them. The big reason for special insurance is technically when you short term rent this is more of a commercial business operation vs. a standard rental. Your management company likely does not insure your premises or your personal liability.
Originally posted by @Jon Crosby :
Usually, the booking company will charge damage insurance (damaged caused by renters) but you could always create your own fee and charge each guest $65-$100 per reservation (mandatory) which will cover YOUR belongings up to $3000 (or something to that effect). You then create your own secondary cash flow after time (this is why insurance companies are so rich, like you said, nothing has happened in 3 years)
Okay, I love this idea, I need to phase that in to my listings...
To the OP: as others have said, what you actually need is either a rider on your homeowner's policy, or a commercial policy designed to cover STRs. A standard homeowner's policy will NOT cover commercial activity.
Renter's insurance is a different thing entirely that you purchase if you yourself are renting a long-term place, to protect your personal property.
Renters insurance is usually utilized for those who are considered "tenants", and since this is considered a second home, you need a supplementary (or rider) to your main homeowner policy.