What is Property Management Insurance?
When managing a vacation rental property, you need to have the right insurance that is going to cover anything that might happen while you’re in ownership of the properties. It covers you from start to finish on all bases, so that you do not have to worry about the management level of things or having accidents happen.
If they do, the insurance will cover the costs, allowing you to breathe easy. The property management insurance cost can vary depending on numerous factors.
Do vacation rentals need property management insurance?
If you are someone that manages or owns any properties or buildings in which guests or tenants reside, then you likely need to obtain Property Management Insurance. This will ensure protection in case something happens. It is common for those managers that oversee everything to have this type of insurance. Whether it is covering condos or apartments, commercial buildings or main street properties, it is a must.
Types of property management insurance cover for vacation rentals
Managers of these properties, even when being short-term rentals, need to have insurance that covers their clients, themselves, their business, tenants and the properties in question. While the insurance coverage needed for a property manager is somewhat the same as a business would hold, there are also some extras that come with property management company insurance that does not come with the other types of business coverages.
Having a well-designed, unique insurance policy to protect you from any and all liability claims and legal proceedings against the properties can be an ideal way to conduct business and cover yourself.
Errors and Omissions Insurance
Since you’re providing a specialized service, all property managers should have professional liability insurance coverage. This is also known as property managers’ Errors and Omissions Insurance. This is to protect you against any outside claims – such as wrongful eviction, invasion of privacy, etc. This coverage protects both the tenant and the landlord against any financial losses that come from the property manager.
General Liability Insurance
While E&O Insurance is able to cover some specialized services, the need for General Liability Insurance is also a must, especially when it comes to vacation rentals. This insurance is appropriate for all businesses in the day-to-day, no matter what type of business they own and operate.
Having both General Liability and E&O insurance coverages will ensure that you have the necessary coverages needed in case something were to happen while renting vacation properties out to visitors. This is part of the residential property management insurance claims.
Vacation rental owner’s insurance
The vacation rental owner’s insurance is something that each owner of a vacation rental should have. Not only does this cover those that are staying within the vacation rental, but it also can cover the losses of the property itself in case of vandalization, robbery, fire or any other accidental damages that occur while the building is or is not occupied.
This insurance is a requirement for the owner to purchase the home and hold any type of loan on it. If the owner does not have this insurance, the property manager, as part of his licence, may extend the coverage that they have for particular losses, but not all. So it is important that an owner of a vacation property has this.
Deposits and damage coverage
Damage coverage from the renters is usually paid for through the deposit that they put down on the property. This is something that is asked for by the owner or manager prior to having the person stay within the rental. This payment should be mentioned before the guest makes their reservation at the property.
The guest can then agree to pay the refundable fee and, also, be made aware of the consequences of deduction should the home be left in a mess or with property damage. Insurance generally does not cover this type of damage, which is why the deposit is requested by the owner. It is an additional safety measure to protect properties from destruction.
There are additional insurance options for those that are coming to stay within the vacation rental. This insurance covers any damages or issues that may arise from their own faults, as well as bodily damage and harm that might come from accidents that happen inside the home. The owner or manager may choose to offer this insurance through their insurance company, or the person staying may opt to use their own homeowners’ insurance for these claims.