Mo money, mo problems
When we agreed to buy a summer home in Frankfort, Mich., we mostly knew what we were getting into: Lots of upfront costs, possible maintenance work (since it’s an older house) and higher taxes since this home won’t be “homesteaded,” just to name a few.
One thing we weren’t quite expecting? Homeowners insurance. Sure, we knew we had to get it, but we’ve learned a thing or two about getting insurance for a property that would also double as a short-term rental home. Let me tell you, it’s not easy finding somebody willing to insure a home that will have loads of people in it over the course of a year. Some lessons we’ve learned, in the even you’re ever considering getting and renting your summer home:
1. There’s no such thing as an online quote. First off, forget trying to get a quote online. Even if you can get past the “This quote requires talking to an agent” screen, chances are, no matter what you’ll have to talk to an agent. I was able to get a quote from State Farm online, but, even though it specifically asked me how many weeks I would be renting the property to others per year, they were just kidding; they didn’t want to insure my house. That was unfortunate, as the quote proved to be the best deal so far.
2. I hope you can handle rejection. State Farm. Farmers. A bunch of other insurers. None of them even wanted to consider us unless they had our primary home too. In some instances, they wouldn’t cover rentals no matter what.
3. That means your primary home insurer will save the day, right? Heck, no. While Liberty Mutual agreed to cover our rental property, it wanted our first-born child and nearly 3x more than what we’re paying on our primary home. OK, maybe they didn’t ask for the child, but I wouldn’t put it past them. If I wanted to lose that much money, I would have rather waged it all on OSU in the NCAA Tournament (too soon?).
Thankfully, there are a few “commercial insurers” out there that can help. The popular vacation rental website HomeAway has actually partnered with CBIZ to offer affordable vacation rental property insurance that replaces a traditional homeowners policy. Not only does CBIZ offer good coverage levels, but it also does so at a fair rate. We’re working through the process of securing insurance with them and we’ll keep you posted on our adventures.
Just a word of warning for those considering dipping their toes into the rental market …