What Insurance Issues Should You Avoid Before Listing Your Home for Short-Term Rental?

More and more travelers are looking into temporary lodging that offers more than just a bed and a bathroom. Homeowners realize they can make a good amount of money if they choose to rent out their homes on a short-term basis. This can provide a nice little windfall, but it doesn’t come without risks. Making sure you have enough insurance coverage is important to make sure your home is always protected.

Understanding Limited Host Insurance

Host protection insurance offers liability coverage of up to $1 million for personal injuries and property damage for each type. It also makes sure landlords are protected as well. Host insurance is good for many different situations, but it does not offer full coverage. Even though you have host insurance, you will still want to ensure that your homeowners policy is sufficient. Reviewing your policy is a must.

Regular Homeowners Insurance Isn’t Enough

Regular homeowners insurance is meant to cover your personal property as well as your home. This includes any damages caused by storms and natural disasters, but you will still need to supplement your insurance for location-specific risks such as floods, hurricanes, and earthquakes. You will also need to buy additional coverage for your more expensive items. Since host insurance only covers your property when it’s occupied, you will need a policy for when it is vacant.

Location, Location, Location

When you are deciding whether to rent your own home out on a short-term basis or buy a separate rental property, location is a key factor. You want to make sure the property is in a good location where it will continually attract potential renters. If you can’t rent the property at least 60% of the time, it may not be cost-effective to enter into this type of venture. Buying a home to live in is one thing. You have a whole new set of costs to factor in if you plan on using the property as a rental.

Install Basic Safety Systems

There are many safety systems that can be added to your property to make it more secure and provide your renters with a stronger sense of security. Sprinkles systems, home security systems, and environmental sensors are all designed to protect your home and guests. Have a first aid kit available and make sure working fire extinguishers are placed strategically throughout the home. Smoke alarms are also a must. It’s also a good idea to child-proof your home to make sure smaller guests stay safe.

Be Aware of Local Regulations

Before you turn your property into a rental, you will want to check out any local regulations that may be in place. This includes zoning restrictions, business licenses, and any permits that may be needed. Taxes may also need to be collected if you rent your home out for short-term stays. Remaining in compliance with these local regulations will prevent you from being hit with fines or fees that will eat away at your profits.

Family Financials Insurance Group Can Help!

Renting your home or rental properties will require you to be diligent when it comes to taking care of your properties and the financial investments you have made. Contact our agents here at Family Financial Insurance Group. We have many of the answers you are looking for and will be able to guide you through the process of taking care of your properties.

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