Anything can happen in a vacation rental. And sometimes, anything makes it happens
Rental nightmares range from minor annoyances, like ant infestations, to major ones, like flooding. As a consumer advocate, I’ve seen it all.
Ants were my unwanted roommates in an apartment in Athens this summer. As soon as I had put a slice of baklava on a plate, they surrounded it, ready to take it away. And by “remove it,” I mean like those giant red ants inside Indiana Jones and the Kingdom of the Crystal Skull. There was nothing to salvage—until the vacation rental manager sent in an exterminator.
I’ll never forget the cabin in Pennsylvania that was nearly washed away in a flood a few summers ago. After a flood, I thought my car would float in the nearby river. Fortunately, it didn’t.
Whenever I think about these disasters, I ask myself: Would travel insurance have made a difference?
Sometimes the answer is yes. And it turns out travelers have been thinking the same thing lately.
“With domestic travel on the rise, we’ve seen increased demand from travelers looking for independent vacation rental damage coverage,” says Katie Crowe, a spokeswoman for travel insurance company Battleface.
But is insurance also necessary for a vacation rental? What does it cover and how is it similar to – and different from – regular travel insurance?
Yes, you probably need insurance for your vacation rental
If you’re staying in a vacation rental, travel insurance is a must, says Christina Tunnah, global general manager for World Nomads Group. After all, you’re probably staying in a house worth hundreds of thousands of dollars.
“Travelers need to be 100% sure of their liability if they damage a home,” she says. “What happens if they accidentally back your car into a fence? Does your homeowner’s home insurance cover them for that?”
The answer is: not always. Fortunately, some individual travel insurance plans have coverage for third party liability. That’s worth considering when renting a vacation home, she says.
But that’s not the only reason to consider insurance. Angela Borden, a product marketing strategist with Seven Corners, says most travelers who rent a vacation home or condo are concerned about protecting the money they spend on rent and airfare.
“These expenses typically represent the majority of the cost of a vacation for this travel scenario,” she says. “With this in mind, travelers should carefully review their travel insurance plan document, focusing on the covered reasons for travel cancellation.”
Two types of insurance for your vacation rental
“It’s important to distinguish between the two types of vacation rental insurance,” says Stan Sandberg, co-founder of travel insurance site TravelInsurance.com.
Trip cancellation coverage
A travel insurance plan with trip cancellation coverage can protect those costs if a policyholder has to cancel for a covered reason such as sudden illness, including for COVID, or hurricanes,” says Sandberg.
Rental Damage Coverage
If something happens to your rental while you’re at it—say, you spill red wine on the white carpet—damage coverage can help cover the costs. Note that coverage does not include intentional damage, such as a loud party.
Both are becoming more popular, Sandberg says. “We have seen a significant increase in the purchase of travel insurance to cover prepaid and non-refundable holiday rentals,” he says.
How does travel insurance cover vacation rentals?
Most vacation rental coverage is included in a broader travel insurance policy. Here are some of the types of coverage you can get:
- Protection against accidents while renting a property, such as spilling wine on a carpet, breaking a lamp or window, or damage caused by your pet.
- Trip cancellation benefits, which cover an unscheduled hotel night if your flight or train is delayed or cancelled.
- Emergency medical expenses and evacuation. This is especially important for international travel, where your health insurance may not be valid.
Travel insurance can also cover you for items missing from a vacation rental, says Joe Cronin, president of International Citizens Insurance.
“You can also make a claim on your homeowner’s or renter’s insurance, but making a claim can cause your premium to go up,” he says. “Therefore, your travel insurance is your first line of defence.”
I have details on how to find insurance coverage—and avoid a vacation rental nightmare—in my comprehensive guide to vacation rentals.
What does vacation rental travel insurance not cover?
Unfortunately, travel insurance does not cover everything. Here is a list of items your insurance will not cover:
- If you’re having second thoughts about staying in a rental (unless you have a more expensive “cancel for any reason” policy).
- Any financial fraud related to vacation rentals, such as wiring money or having your personal information stolen by phishing.
- Deliberate damage, usually as a result of a party.
- Disputes with a host or platform over missing amenities leading to wasted nights. Travel insurance usually doesn’t cover a hotel if you check out early.
This is only a partial list of items not covered by travel insurance. Remember, travel insurance names the risks you are covered for. Unless specifically named, there is no coverage for it.
What is the most common type of insurance claim?
Of all the covers you can get with your travel insurance policy, the most important may be for trip cancellation.
“Trip cancellation is still, overall, the number one type of claim for any type of vacation — including vacation rentals,” says Carol Mueller, vice president at Berkshire Hathaway Travel Protection. “In addition to the standard trip cancellation coverage, vacation renters are also interested in making sure that the plans they purchase include security deposit protection should an unexpected property damage occur.”
One of the best-kept secrets about travel insurance is that it can cover sunk costs if a destination becomes uninhabitable, according to Daniel Durazo, director of external communications at Allianz Partners USA.
“If a vacation rental is located where a natural disaster has occurred, it may become uninhabitable due to loss of power or water,” he says. “Make sure you document the problems and then file a claim with your travel insurance company for your sunk costs, which may include the cost of the rental and travel fees.”
Travel insurance covers more than just vacation rentals
Most travel insurance policies are not designed specifically for vacation rental guests. But they cover risks that may affect a guest.
Say you have an oceanfront vacation rental and the beach closes. Your travel insurance may cover it.
“Some travel insurance plans have travel inconvenience benefits that may pay up to a stated maximum benefit amount for situations such as beach closures if the beach at the traveler’s destination is closed by government authorities for 24 hours or more,” explains Sherry Sutton. , vice president of marketing and communications at Travel Insured International.
Sometimes you can add vacation rental damage protection to your travel insurance policy. For example, travel insurance startup Faye has a vacation rental option on any of its basic plans. It covers accidental damage to your rental, such as spilled wine, broken crockery and broken appliances. All its policies also cover foreclosures on rental properties
“This means if the keys to your vacation rental property are lost, stolen or damaged and you are unable to enter the property for three hours or more, you can be reimbursed up to $200,” says Doron Samish, vice president of Faye. product in Faye.
Who needs vacation rental insurance?
I spoke to several travelers who purchased travel insurance for their vacation rentals. They said that while they were worried about a vacation rental nightmare, they were just as interested in other coverages that insurance offers.
For example, Colleen Carswell, an insurance specialist from Bel Air, Md., just purchased a policy through Allianz Travel Insurance for a beach rental. The policy covers common perils such as lost luggage and trip interruption.
“What we’ve personally found most useful about travel insurance is medical coverage,” she told me. “We went on vacation a few years ago when my husband had to go to the emergency room. And another time, my one-year-old son had to go to urgent care. Both times we were out of our health insurance network.”
The Allianz policy covered them.
Buying Tips for Vacation Rental Insurance Policies: Read Carefully
One final note: You’ll want to read your policy carefully before purchasing.
“The best advice here is to review the plan benefits before you buy,” says Brian Rock, national director at VacationGuard.com. “Some plans require all people to be named. Other plans automatically extend protection to travel companions.”
True. I’ve seen a lot of “blunders” during the claims process where someone forgot to mention everyone in the policy or overlooked some other seemingly unimportant detail. Because trust me, if you ever need to file a claim for your vacation rental, your travel insurance company won’t overlook any detail.