What you need to know about vacation rentals and insurance
Updated: Apr 27
It's that time of year: visitors, visitors and more visitors
Owning a vacation rental can be both a positive and a pain in your backside.
Our western NC market has been very popular over the last few years. The outdoors draws many visitors especially those seeking space to roam, activities that are social distancing safe and also a little space between fences.
Homeowners are doing well with their rental income and often use the income to offset the mortgage and home expenses.
On the flip side, having rotating guests through a home multiple times a week and per month, especially during the summer and fall months in our area, means you are likely to suffer damages at some point. In addition, appliances, furniture and fixtures will wear out quicker than standard times meaning replacement or maintenance costs can run high.
Asheville has 3 types of vacation rentals - long term, short term and homestays.
1. House claims vs. Guest claims. Understanding these three types is very important for the homeowner as they impact both your homeowners insurance on the house itself, as well as how claims are handled in the event of damages to the property by guests.
2. DIY Management vs. Property Management Company. Who manages the property is also important as some homeowners hire a property management company to manage the rentals. Make sure the property management company you hire has the proper insurance. In addition, if your property is directly rented through the known companies like Airbnb and VRBO, they often will handle the damage claim themselves.
3. Home Ownership vs. Corporation. Lastly, if a homeowner setups a business entity to manage the vacation rental, that can also impact how claims are processed. Make sure you meet with your agent to discuss.
Short Term vs. Homestay Rentals
Short Term Vacation Rental - Vacation rentals are considered "short term" if the stay is less than one year. These are often marketed and managed by the homeowner. If the homeowner has more than one, they may hire a property management company to manage their vacation rental. These distinctions are very important for the homeowner when damages or loss of income incurs.
Some are called "homestays" which means the homeowner resides on the same property as the short term vacation rental, often renting out a guest bedroom, suite, garage apartment or house level to guests. Contact your insurance agent if you are doing homestays because your home owners insurance may not cover this type of rental.
Property Coverage Differences for each:
Peterson Insurance can provide vacation rental insurance based on these various factors mentioned above.
Frequently asked questions:
We do have access to insurance carriers that will provide insurance to cover vacation rental homes even if you live in a different state and/or do not have other coverage with that specific company.
We can provide estimates by certain companies for homestay insurance by adding that endorsement. Not all homeowners insurance carriers can do this.
We have access to carriers that will provide coverage for homes that rent directly via Airbnb and VRBO. In these cases, you must live in the state and also must have your home and auto with them. This is a great benefit however, because coverage is usually very good.
Whatever your situation, make sure you review your vacation rental ownership with your insurance agency so your investment in time and money remains a positive experience.
Peterson Insurance Group is a family owned and operated independent insurance agency representing multiple insurance companies located in Weaverville, NC. Founded in 2001, the company is owned by Eirene Peterson-Burnette, the successor to the founder, Stom Peterson. Together, with her team, Peterson Insurance provides exceptional, personal service guiding customers through the maze of insurance options. Visit us at 1 South Main Street Extension, Weaverville, NC 28787 or call 828-645-8777.