Insurance for High-End Vacation Rentals: Special Considerations

Managing any short-term rental property can be a nuanced process. But overseeing high-end vacation rentals can be particularly challenging due to the continuous demand and high value of the residences. 

With that in mind, we’ve compiled a list of special considerations to help you protect the high-end vacation properties in your rental portfolio. Here’s what you need to know: 

How High-End Property Insurance Valuations Work 

High-end vacation rentals often feature luxurious amenities and robust furnishings, and they’re situated in prime locations, making them significantly more valuable than standard rental properties. The thing is, these aspects not only increase these properties’ market values but also the related insurance costs and minimum coverage thresholds. 

In response, you need to ensure that your short-term rental insurance policy is both economical and robust enough to offer adequate protection for such amenities. Otherwise, you could be forced to cover the difference between the cost of your items and the benefits that your insurance policy provides. 

Given the unique and valuable nature of high-end properties, it’s important to obtain a professional appraisal of the residence. You also need to gather detailed documentation of all high-value items, including receipts, photographs, and descriptions. These pieces of evidence will prove immensely valuable in the event that you need to file a claim. 

Types of Coverage You’ll Need

Your high-end vacation rental property insurance coverage must reflect the uniqueness of your residence. With that in mind, these are the types of coverage you’ll need: 

Liability Coverage

Guests expect top-notch safety and service, which means that any incidents on your property can lead to significant financial and reputational damage. Every short-term rental property, therefore, needs liability coverage.

However, liability risks increase with the value of your properties, meaning your high-end rentals will have higher thresholds to meet in order to address the added risk associated with renting them out. 

You must ensure your liability limits will protect against substantial claims, including suits for medical bills and damages. Luxurious properties attract guests who may have higher expectations and resources, potentially leading to more costly liability claims if they get hurt while on the premises. 

You may also want to add an umbrella policy to provide additional coverage beyond the limits of your standard policy. It’s an extra layer of protection that can safeguard your assets and provide peace of mind. 

Protection for Unique Amenities

Standard insurance policies might not offer sufficient coverage to fully replace high-end features and amenities in the event of damage or loss. Confirm that your insurance policy includes replacement cost coverage, which covers the price of replacing damaged or destroyed property with materials of similar kind and quality. 

Pools and hot tubs are attractive amenities but also come with increased liability risks. Ensure your insurance policy includes specific coverage for these features, addressing potential injuries and maintenance issues. If your pool or tub was constructed out of rare or luxury materials, verify that the coverage limits will allow you to repair or replace the amenity with similar materials.

You’ll also need protection for add-ons like home theaters, gyms, and gourmet kitchens. These features often involve expensive equipment and appliances that require special coverage. If your home is equipped with any of these items and amenities, ensure your policy protects them. 

Coverage for Loss of Income

Short-term rental insurance policies often offer loss of income protection. Review your income records for your high-end vacation rental property and ensure your policy aligns with your average revenue. If your home becomes uninhabitable due to an accident, you want to make sure your coverage provides enough compensation to offset your losses. 

Depending on the provider, you may need to submit supporting documentation to verify how much income your property produces. Keep detailed records of rental fees and occupancy rates. 

Other Tips to Protect Your Rental Homes 

Here are a few more tips to help you protect your portfolio of high-end vacation rentals from accidents and litigious guests: 

Look Into Potential Guests 

Conducting a background check on prospective guests before admitting them to your property is especially important when dealing with high-end homes, condos, and other rentals. Guest screening solutions can provide valuable insights into these individuals, allowing you to rest easy knowing you are protected from unscrupulous people who have a history of abusing short-term rentals or leaving a trail of damage in their wake. 

Work With Specialized Insurance Providers

You need to make sure you’ve got the right type of policy. Short-term rental insurance providers like Safely specialize in serving property managers with portfolios of residences. Our team can create a custom quote that protects every home in your portfolio. We can adjust cover limits and policy costs to align with your business goals while also giving you peace of mind. If an accident happens or a guest suffers an injury, we will be there to help. 

Install the Latest Safety Features 

Guests expect the very best when they fork over the money for a luxury vacation rental. Make sure you deliver by equipping your homes with the latest safety features to reduce the risk of an accident. Doing so will show guests that you have their best interests at heart while also decreasing the likelihood of filing an insurance claim.

Keep Records and Photographs of Amenities 

You can never have enough documentation to protect your high-end vacation rental. Take photographs and videos of any specialty items or amenities, including saunas, pools, spas, and home theaters. Such evidence will work to expedite the claims process.

Additionally, you’ll want to inspect your property after each guest departs. If there are any signs of damage that warrant an insurance claim, take photographs of the issues and inform your provider right away. The sooner you initiate the process, the quicker you’ll be able to make necessary repairs.  

Don’t Put Your Portfolio at Risk: Protect It With Safely 

If your short-term rental property portfolio includes high-end properties, it’s vital that you partner with a provider that understands the nuances of protecting these types of residences. The team of specialists at Safely serves property managers who oversee 10 or more short-term rental properties and will be happy to help you protect your investment. Request a quote today.