You've decided to invest in a short-term rental in Wilmington, NC. It's a beautiful area that sees a lot of vacationers, so everything is going smoothly. That is until someone had an accident on your property.
Now, the vacationer in question is attempting to sue you for damages! Your homeowners' insurance doesn't cover that!
This exact scenario is why having short-term rental insurance is so important. Continue reading to learn more about what it is and what it covers.
What Is Short-Term Rental Insurance?
Short-term rental insurance is also known as home-sharing insurance. It will cover you while you have vacationers staying in your rental.
Many short-term renters make the mistake of relying on their homeowner's insurance alone to take care of them. In truth, it won't cover you if you're using your dwelling as a business. At least, you won't be able to get the level of coverage you need to protect yourself and your guests.
What Does It Cover?
Short-term rental insurance covers the dwelling itself. This means if one of your guests catches the kitchen on fire while cooking eggs, your insurance company will pay for the structural damages.
If one of your guests breaks your television or other personal property, you can have it replaced through your insurance company. If you can't rent out your home because it's being repaired, you can receive compensation for the income you lose out on.
Your short-term rental policy will also include liability insurance. So, if someone is injured while on your property, the insurance company will take care of the vacationer's medical bills.
If a guest decides to sue you, and you're found at fault for their injuries, your liability insurance will cover the legal fees.
What Does It Not Cover?
Now that we've talked about what short-term rental insurance covers, let's go over what isn't covered. It does not take care of flood or earthquake damage. You'll have to buy a separate policy for that.
Your insurance company also won't step in to help in cases of mold, rot, wear and tear, maintenance issues, and pest infestations.
Do You Need It?
If you rent out your home to vacationers frequently, having short-term rental insurance is essential. Not having it could cost you more money than you'd save.
Depending on your situation, you may be able to add short-term rental insurance to your regular policy for an extra fee.
If you only rent out your home a few times a year, you can get by without it. Your regular homeowner's insurance will most likely give you all the coverage you'll need.
If you accept guests all year round, short-term rental insurance won't be enough to cover you. You'll need to opt for landlord insurance instead.
Protect Yourself With Short-Term Rental Insurance
Renting out your Wilmington, NC, property can be a great way to generate passive income. Before you clean up your home and get it ready to receive guests, you'll need to invest in a short-term rental insurance policy.
Of course, your insurance company won't cover damages caused by poor maintenance. Hiring a property management company will ensure your vacation home always stays in the best shape.
PMI Wilmington is a leading expert in expense and liability for property owners. Contact us to learn more about our services.