Rental program and insurance

[ragmor]

As a former long time casualty insurance agent, there are differences between owner occupied, full time rental, and vacation rental exposures.

Owner occupied = Homeowner’s policy
Full time Rental = Rental Dwelling Policy. Check to be sure you have enough coverage on Personal Property if you rent it furnished. these policies normally come with reduced Personal Property coverage because most full time rentals are rented unfurnished.

Vacation Rentals Many companies won’t touch this at all. For others, it depends on how many days per year you plan on renting it out. Some just leave the Homeowners in place if it is less than 30 days per year. Others go to a Rental Dwelling policy but charge a higher than normal Rental Dwelling premium because this is considered a much higher risk exposure by these insurance companies.

This why you need an insurance agent who knows their stuff. And there are many that don’t. Buying on line with no personal relationship with your own agent is very risky here. There is no one that you can hold accountable for placing the wrong policy on the property and, after the fire, end up with no coverage because it was caused by an increased exposure to a Business Risk that was not revealed to the insurance company.

Ray Gilmore

[caleach]

Thanks Skip,
I will post any follow up.
Steve

[skipamy]

We’re using Century 21 to manage our rental, started in 2012. It mostly sits unoccupied, but rents out winter weekends (starting this year because the ski conditions were so poor the last 3 years) and summers. Made two changes to our insurance (Allstate):

1. Converted the regular Homeowner’s Insurance to a ‘Landlord’s package’. I can’t tell you exactly what changed without looking into it, but it wasn’t a huge premium change.

2. More importantly, added the Big Trees property to our Umbrella Policy for a small fee. I didn’t realize we had to do this, figured the Umbrella covered us, not our home. But it was a small price to add a large liability coverage for anything that might happen to our guests, should they decide to sue us for something, e.g. slipping on ice.

[caleach]

We have gone back and forth over the last couple of years regarding the placement of our house into a rental program. The last time I talked about it with our insurance company we were told that they would not insure the house if it were in a rental program. I am not sure if there is a difference between a permanent rental versus letting it out through a realtor for short term renters.

Our question at this point is for those of you who put your house into a rental program how do you handle insurance?

Thanks for any feedback.

Steve

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