What Does Vacation Rental Insurance Cover?

The matter of organizing your vacation rental insurance is a crucial part of your short-term rental (STR) business, but understanding what to expect from your insurers can be a challenge—especially with so many services around, including what platforms like Airbnb and Vrbo offer.

So don’t worry if getting to grips with vacation rental insurance feels overwhelming—we’re here to explain:

• How vacation rental insurance works
• What and who it covers
• What you should expect from the best levels of service

Guests? Owners? Managers? Who is covered by vacation rental insurance?

Most homeowner insurance policies don’t cover you if anything goes wrong while your property is being used for commercial purposes. So if you want to be covered, you need specialized short-term rental insurance.

Something else to be aware of is that not all policies cover all the invested parties—guests, property managers, and vacation rental homeowners.

So a key consideration with STR insurance is not just how much it costs and what is covered, but who is covered.

Your guests are covered

If your guest isn’t covered by your insurance policy and they cause damages during their stay, you could end up in a costly, stressful conflict centered around financial liability. But if your guest is protected via your STR insurance, you can painlessly avoid not just a legal process, but a potentially damaging guest review, too.

Property managers are covered

As a property manager, you may have dozens or more units to oversee across your entire portfolio, each with a property management agreement that can leave you financially vulnerable in the case of an accident caused by negligence. With liability protection, you have a solution in place that could save your business and hundreds of thousands of dollars in a worst-case scenario.

Property owners are covered

Owning a vacation rental property means having a valuable asset that you’ve put time, effort, and money into. When a stay goes wrong, you need to be confident that you’re protected when it comes to content damage (think appliances, furniture, and belongings), structural damage (for example, windows, doors, flooring, or walls), or the cost of an in-stay accident as the result of negligence.

Protecting you in the event of structural property damage

Structural damage can be very costly if it happens to your vacation rental property, so you need to be sure you’re covered when it comes to repairs. With Safely you can be covered for up to $1,000,000, but what exactly does this include?

What is covered

Having strangers on your property means risking breakages and damages, whether accidentally or on purpose. Luckily, the best vacation rental insurance solutions do cover deliberate structural property damage—so if a party gets out of hand and somehow results in a hole in your wall, you can be covered along with damage to windows, doors, floors, bathtubs, and some built-in appliances.

What is not covered

Natural wear and tear can be expected from any rental property, but this isn’t normally covered under short-term rental structural damage. Other exclusions would be damages that weren’t caused by the guest.

For example, the damage caused by a natural disaster like flooding would probably not be included in your vacation rental protection—this would more likely be covered by home insurance, but you should check your policies to be certain.

Covering your contents

So, what’s the difference between structural and content damages? It can be confusing but there’s a simple way to think about it.

Imagine your vacation rental home being picked up, turned upside-down, and shaken. Anything that falls out is contents and amenities, anything that remains is structural.

This is an important distinction because it can impact how much you can claim.

What contents are covered?

With Safely, you can claim the replacement costs of up to $10,000 for property contents and belongings. So whether it’s replacing a bedsheet because of a mascara stain or buying a new television because your guest put a hole in the old one, you have cover.

What contents aren’t covered?

The contents covered under the insurance policy are owned by you—so guest belongings are not covered.

Other exclusions are any contents damaged by natural disasters or other ‘acts of god,’ for example, a window being hit and broken by a bird. It really has happened, but unfortunately for that property owner, it wasn’t covered under vacation rental insurance.

Taking the financial pain out of guest injuries

Using Safely as an example, bodily injury caused by negligence is covered by up to $1,000,000.

Note that the use of the term negligence is important—you can make a claim for a slip in a puddle of water or a trip over an upturned rug. But a muscle injury is less likely to be covered since it probably wasn’t the result of an accident.

Get protected before they arrive with guest screening

One of the biggest concerns you’ll have is letting the wrong type of guest into your property. The vast majority of guests meet all our expectations and are simply looking to have a fantastic, responsible stay.

But a bad guest can cause disturbances, have a wild party that results in enormous structural and contents damage, and even cause damage to your neighbor’s property.

So as well as being aware of how you can be protected by vacation rental insurance, you should also be clear on the benefits of guest screening. In the case of Safely, we offer guest screening as a free additional service to your STR insurance.

So how does our guest screening work?

• Our systems connect with your PMS, so when your guest makes a reservation, we can begin a non-intrusive, automated check.
• We scan court records, nationwide, and international criminal databases, as well as checking credit history, looking for any red flags you need to be aware of.
• We also check our own personal database of guests who have caused damage to vacation properties in the past.
• We then provide you with a risk score for each guest reservation so you can make an informed decision about who to let in your home.

Having your guests screened in this objective manner—instead of self-checking them with your own questions and searches—not only gives you a more accurate picture of their potential risk, but also ensures you’re covered legally.

If you decide to cancel a reservation based on a screening, we follow the Fair Credit Reporting Act (FCRA) and inform them for you.

How often do claims get paid?

Making a claim with Safely is simple and quick. Best of all, 98% of all claims with us are paid in just 4.5 days, meaning you can take action straight away to resolve any issues and get your property back on the market and earning rental income.

We know that making insurance claims can be daunting so we’ve made sure our process is as straightforward as possible, with just three simple steps involved:

1. Take pictures of the damage
2. Submit your claim
3. Let us handle the rest!

Protection with vacation rental insurance

Short-term rental insurance protects your property and contents—but you need it to protect all parties or you run the risk of a dispute.

Here’s a rundown of what you should expect from the best vacation rental insurance:

• Structural damage, the amenities and contents of the property, and bodily injury caused by negligence
• Protection for guests, property managers, and vacation rental owners
• A simple claims process
• A record of paying out fast
• Free automated guest screening

And on top of all those features and benefits, you should also expect your vacation rental insurance solution to be a partner that understands your concerns and is here to help—just like the friendly team at Safely.