Whose insurance covers what in the world of vacation rentals?

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Recently, we heard through the grapevine about a friend of a friend who'd lived something of a cautionary tale—suffice it to say it involved theft and damages in a vacation rental. (Not exactly anyone's idea of summertime fun.) Which begs the question: If you end up facing the worst case scenario on your summer vacation, who pays for it?

Turns out, it really depends. While some apartment insurance policies do cover theft and other damages that happen while you're traveling, don't book a trip on the assumption that it's all going to be covered. "Many policies in New York do not cover theft losses outside your primary residence," says Jeff Schneider of Gotham Brokerage (FYI, a Brick sponsor). 

If you're simply looking to extend your liability coverage (the kind that covers injury on the property), Schneider says, you can do that for "a nominal charge, if any, assuming you're staying in the place for just a few weeks." (Think something in the ballpark of a $50 one-time fee.) 

As for your contents coverage (the coverage that covers your physical property), "usually the coverage can be added," says Schneider. "But you have to price it out to see if it makes sense. If you travel a lot or bring expensive stuff to a temporary vacation home, like a $2,500 bike, it might well be worth it. But if you're just worried about someone swiping your iPad when you travel once every few years, it's not worth it." If you do opt to extend your contents coverage for your vacation home, you're looking at a surcharge of around 30 percent more than the usual yearly contents cost of your policy.

And if you're the one renting your home to vacationers, you'll be facing stricter rules, whether it's your apartment in the city or a vacation home that you're looking to rent out. While some policies do allow for one-time sublets, says Schneider, "landlords must notify their insurer or broker that the house is being rented out, as usage under Airbnb or as a share house almost always voids coverage on a standard home policy." 

If you want to make sure you're covered while your guests are in the house, says Schneider, buy a separate, more expensive policy (expect at least a 25 percent premium), as renting out a home adds on a lot of additional risk.

Bottom line: The situation differs depending on your specific policy and the nature of your particular vacation setup, so check in with your insurance company before you leave (or usher in guests).



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