Can I Rent My Summer Home? - Taylor Haines

Can I Rent My Summer Home? - Taylor Haines

It is very likely that either you, or someone you know has used a house rental site and some even consider making their spare property a place to rent out to vacationers. However, your home may not be covered under your current insurance plan for rentals. “If I rent out my second house on [Insert rental site here], does my insurance cover that?” The short answer is: Maybe. The long answer is: Keep reading. Different companies have different underwriting. The first place you need to look is in your homeowner’s policy - but you’ll have to do a little digging. The first part of your policy is called your “Declarations Page”, it shows us your basic coverages such as the amount your house is covered for and what optional coverages you may have purchased on that property. If you leaf through your paperwork, you’ll come to the “Definitions” section where the contract clearly spells out the who, what, why and how. For example, my policy with Utica First Insurance Company clearly states that “Insured means you” and then lists a few other definitions of “Insured,” which have different definitions of what is covered and what is not. Should I be renting out my house, and something was to happen to it, Utica would likely deny the claim since I am not the one living there at the time of the loss. My policy is also written as what is called an HO-3 Form policy, a primary homeowner’s policy. These usually exclude any liability or property damage coverage. Further down, we even have an amended endorsement specific to New York state, this endorsement gets pretty specific saying that “If you own and reside in...” That’s a clear “NO” to the question! So how do I get this covered? You have to have your policy insured with a carrier who allows for short-term rental usage. There are certain providers who specialize in writing homes that are used for Airbnb, VRBO and the like. They achieve this by writing an endorsement to allow for incidental rental use. If your property is solely a rental unit, then that would be written another way - as a rental property, or Dwelling Policy (DP). These premiums are typically higher in cost (due to the higher risk) but properly protect you as a property owner should a tenant damage or destroy your property. What does it cost? Typically, we see premiums around the $1,000+ mark when including the proper endorsements to make this policy feasible. But recently we have quoted a few short-term rentals that fell far under that. It all really depends on those factors I mentioned above, and how familiar the company is with writing those types of policies.

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