PO Box 778 ~ 51379 South Hwy 97

La Pine, Oregon 97739

Phone: 541-536-1718 or 800-506-1718

Fax: 541-536-5032 / Email: info@lapineins.com

Homeowner's Insurance For Vacation Rental Homes

Accidents happen. Shield yourself from the unforeseen with Homeowner's Insurance. Don't overlook the importance of insurance and understanding why homeowners need to have it. If your vacation home or condo is part of an association, investigate to see if the association has a master insurance policy or a blanket policy that covers the common grounds and insures the exterior walls of the building (generally up to the sheet rock). If the building that houses your condo is covered by such a policy, you likely won't be required by your mortgage company to purchase separate insurance. Still, it would be wise to consider buying some. Without it, any coverage for everything inside your property (such as the cabinets, fixtures, and so on) is all for not.

Also consider purchasing extra insurance if your property is located in an area that is at high risk for natural disasters such as hurricanes or floods. Proximity to the ocean or lakes can affect your risk. Yes, flood and hurricane insurance can get expensive, so research your options carefully. When shopping for a new property, don’t consider buying a place that is right on the beach—until you find out the costs of hurricane insurance. This has proven to be a huge consideration when deciding to purchase a vacation home. For more information, please contact an agent at La Pine Insurance Center.

Personal Liability and Rental Insurance
In addition to homeowner's or property insurance, consider purchasing personal liability insurance. Often, you can select this option as a rider policy on your current homeowner's insurance as an extension of liability on your second home. This is important because, in today's overly litigious society, what happens if your renters slip and hurt themselves in the shower and declare that their injuries were caused by some problem in the home? Then it becomes your fault and the issue could turn into an expensive legal battle. Insurance protects you from that. Also look into a specialized kind of policy known as rental insurance that covers your property in case you have a loss of rental income revenue due to events such as floods, fires, and so on. The cost for this kind of insurance is too high to justify and if you don't carry it on your properties. However, you might feel more secure purchasing insurance to cover a wide range of possibilities. Get educated right. from the beginning and make good decisions for your circumstances.

Determining the Right Insurance for Your Vacation Home
Your primary residence is located in one area of the country and you're buying a second home in another area. What do you need to know about different insurance needs in different areas? What types of insurance are available?

Depending on where your vacation home is located, you'd consider buying policies covering the following:

• Wind damage


• Flood damage


• Owner-occupied vs. non-owner-occupied

It's difficult to find insurance specifically for vacation rental usage, though a few companies are now coming out with policies for this niche. Remember, offering a home for short-term rental means you are in business—the business of providing an expensive asset to your customers. While your rentals may be booming, your rental income may be disproportionately low compared to the value of the real estate you allow guests to use. When you do your homework, you may be surprised to learn that everyday property and casualty insurance on your primary policy is not designed for rentals, therefore it can be inadequate to protect your property. That means your current insurance carrier may disallow claims relating to incidents with renters. Indeed, the carrier may cancel your coverage with little warning if there is ever a claim, or simply won't allow coverage of guests. This could leave you holding the bag for thousands of dollars. Even if you think you're properly covered, you'd be wise to take a second look. Here's a general rule of thumb: Avoid taking risks that could cause you to lose your home or dramatically affect your finances. To discuss ‘vacation rental’ coverage, contact your agent at La Pine Insurance Center.

Do you have any advice about homeowner's insurance for other owners?
Just make sure that your insurance covers the structure of your home, the belongings inside it, the type of natural disasters affecting your area, any liability resulting from a guest getting hurt on the property, and loss of rental income should your home be damaged to the point where you cannot rent it out.

For Personal Liability, always start by asking the agent or company writing your primary Homeowners policy if they will extend your existing liability coverage to a secondary rental location. This is often a cost-effective way to protect yourself without incurring the higher cost of a separate dwelling policy. Plus, if you have an Umbrella policy, your higher Umbrella limits will also apply to the covered claims arising out of the rental property.

Vacation Home Insurance

Part-time Home, Full-time Insurance. You only use your vacation home for part of the year, but that doesn't mean you need part-time insurance. The right kind of coverage is just as important for secondary homes as it is for your primary residence for several reasons: First, because vacation homes are not occupied full time, the risk of theft and catastrophic fire damage is higher. Second, homes regularly rented to others are more likely to generate claims for property damage. Third, huge damage payments from hurricanes in recent years underscored the potential liability of insuring structures near coastlines.

When you buy a vacation home, don't forget to make sure your insurance isn't taking a vacation. Here's an insurance overview for your second home:

Many of the coverages you have on your primary residence should be applied to a vacation home. For instance, it needs appropriate dwelling coverage and personal property limits. Renovations and protective devices on your secondary home may generate discounts similar to those on the primary home. One major difference is that often, liability coverage may be extended from the primary home to the secondary home, especially if both homes are written with the same insurer. In the event liability insurance is not extended from your primary home policy, you should purchase liability insurance for your vacation home. No matter how careful we are, there is always liability risk associated with a home and its surroundings. When choosing the location of your vacation home, consider the local climate. For instance, homes built on the coast are at greater risk from hurricane damage. Homes built in low-lying areas such as near a river bank or pond are at risk for flood damage. Consult your La Pine Insurance Center agent to determine if you are in a designated flood plain. Finally, if you can't find an insurance company to cover your vacation home, contact your state insurance department. Some states have created plans that will offer insurance when other options don't exist.

NOTE: Portions of the above information have been provided by The Insurance Institute. These definitions are not applicable in all states or for all products. This is not an insurance contract. Other terms, conditions, and exclusions apply. Please read your policy for full details about your coverage. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.