You have worked in the hospitality industry for a number of years. What are some best practices for protecting one’s vacation property from liability and risk?

The good thing is that every guest you accept into your rental home needs to use a valid credit card and drivers license or passport to successfully rent out a vacation property. This gives the landlord stability to make sure their guests behave, and if they don’t, you have recourse to put any damage onto their credit. As a landlord, you also have the responsibility of making sure your guests review the liability and risks on the registration forms, confirming their understanding beforehand. I know vacation rentals hit a spiked interest during spring break season for a lot of college kids, so if you’re located in this environment, a good way to avoid the risk of a rowdy crowd staying at your place is verifying on the listing site a specific age requirement for prospective guests.

How important is it to invest in property insurance when renting your vacation property?

I think it’s critical. It may be more expensive, sure, but why would you put yourself at risk from a liability standpoint? You can go to sleep at night knowing that even if a guest starts a fire in your rental, you’re still covered. If you don’t buy insurance for your vacation-rental property, you’re not a business person, you’re just playing games. You must have insurance — it’s not even a conversation.

For those people who are new to the vacation-rental sphere, what’s one piece of advice you’d give these property owners who may be looking to rent out an entire property or even just a spare room?

The first priority for those just entering the vacation-rental space is to go online and look up a course on how to become a property manager, as there are many of them out there to educate yourself with. The second priority from a guest standpoint is to treat the person staying at your vacation rental like they’re your grandmother that you haven’t seen in twenty years. If you’re looking at renting out your place as just a simple money grab, you’re not going to be successful long term.
Long story short: Go online, learn what becoming a property manager is all about, invest in a partnership with these vacation listing sites so that you can start maximizing your property presence and your profitability and treat every guest that enters your vacation home like family.

What to Know When Getting Your Vacation Home Insured

An estimated 600,000 homeowners in the United States earn extra income by renting out their homes on a short-term basis.

Many vacation-rental business owners believe they can rely on their standard homeowners or landlord policy for protection. While these policies provide property and liability coverage, they typically exclude business activities, which means liability claims arising from rental activity will most likely be denied.

The insurance industry offers options that range from liability-only coverage through online-booking sites to comprehensive property and commercial general-liability coverage. But with several options available, it can be difficult to know which option is best.

When choosing insurance for your short-term vacation rental, make sure coverage is available and appropriate for the exposure. Some policies won’t cover the risks associated with home sharing, for example, but are ideal for whole-house, short-term rentals.

Keep in mind that as soon as a home is advertised as a vacation rental, the home becomes a place of business, and the risk to the property and exposure to liability claims substantially changes. At minimum, a vacation rental should be protected by an insurance policy that includes property coverage and commercial general liability (CGL), as well as business-income coverage. CGL insurance provides protection against claims arising from your business operations, as well as advertising and personal-injury liability. Business-income coverage provides financial relief while your property is being restored after a covered loss.

Source: Tony Melillo, Sales Manager, CBIZ Vacation Rental Insurance