Finding a home away from home is a great way to spend your vacation. Many families find a location they love and rent a cottage or condo nearby, and have such a great time they return year after year. However, without the proper trip insurance for vacation rentals, renting that home away from home could risk you losing a lot of money if you have to cancel.
Most people who own vacation rental properties work to keep them booked year round. They usually ask for partial or full payment in advance, and they don’t give you a lot of options to cancel if something comes up at the last minute.
Consider what happens if you booked your vacation cottage six months in advance, and when vacation time rolls around your come down with the flu, or an unexpected commitment that ruins your vacation plans. Or what if you are on vacation and plan a 14-day stay only to be called home to deal with a family emergency? You usually can’t just call the property owner and ask for a refund. If they can’t re-rent the property on short notice, and sometimes even if they can, your contract says you have to pay, whether you stay or not.
A lot of trip insurance covers trip curtailment in the event of illness or emergency, but you have to read the fine print to see what’s really covered. If any of the party become ill, are called for jury duty, have to cancel due to weather, are suddenly unemployed, or face some other emergency, most often, your travel insurance covers any costs due to lost rental fees. Some insurance carriers also offer a “change of mind” clause that allows you to cancel of any reason, but these will be more expensive.
When you purchase travel insurance to cover a vacation rental, make sure that everyone that is joining you in the vacation home is covered by travel insurance. Divide up the cost of the rental among all the occupants, and have everyone purchase travel insurance that includes their portion of the cost. This gives you the maximum flexibility in the event of a cancellation. If everyone is covered by insurance, and one of your party has to cancel, everyone can cancel and is covered. If just one couple has to bail on the vacation due to a covered reason, then everyone else can still use the vacation rental, and that couple can be reimbursed for their cancellation without affecting anyone else on the trip.
Some vacation rental websites offer a “Carefree Rental Guarantee” that protects against foreclosure and bankruptcy of a vacation home owner. These are not insurance products, but instead are intended to create a safer environment to rent a vacation home. Always read the details of the guarantee carefully to see what it covers. There are typically a lot of exclusions, including fraud. Even travel insurance cannot cover you for fraud, so when you pay for your vacation home, make sure never to pay in cash or a check. Always use a credit card, and get a confirmation of payment from the owner.
So before you commit to that cottage by the beach for two weeks, look at your trip insurance vacation rental coverage:
1. What is the cancellation policy for the vacation rental? Do you need Cancellation Insurance for added protection?
2. Do you need Trip Cancellation and Trip Interruption protection in case of illness of a family emergency?
3. Do you need liability insurance or coverage for property damage, like renters insurance for your vacation property?
Even though you are going to be in that vacation rental for a very short time, anything can happen. It’s best to be prepared rather than be sorry if something unexpected happens.