Top 3 Insurance Claims For Mid-Term Rental Hosts

Hello and welcome to Invest Smart with Steadily. I'm CJ Long, Director of Claims at Steadily, and today we're going to talk about the top three mid-term rental claims. If you focus on furnished rental properties leased 30 days to 6 months at a time, or you're using platforms like Furnished Finder, then this conversation's for you. Here are the top three claims that we see and you should be aware of.

In the mid-term rental space, you often see a hybrid of exposures between what a long-term landlord may experience and what a short-term landlord may experience.

Coming in at number one: weather claims. Hail and windstorms are by far the most predominant, but wind can be anything from a tornado ripping off shingles to knocking down that large oak tree onto the roof. It's critical that in these situations you are taking action to mitigate damages. Most policies are going to cover reasonable emergency measures taken to prevent future losses. Get a tarp on the roof to prevent water damage. Get that tree removed to prevent further structural damages. Failure to mitigate can lead to damages not being covered. Take photos, retain invoices, and make sure those are ready to submit as part of your claim.

Coming in at number two: water damage. Most predominant here are burst pipes and roof leaks. Water does not get better with time — again, take action to mitigate, photograph, document, and retain invoices. One point I want to add here that I see a lot of confusion around is the difference between a pipe bursting and groundwater or surface water causing damage. Groundwater, surface water, or floods are not covered under the standard dwelling policy. If you're looking for a flood policy, talk to your agent, make sure you maintain the property, and ensure proper drainage.

One common misconception that comes up when we're talking about vandalism and destruction of property is the confusion around what is vandalism and what is general wear and tear. A tenant that is careless and doesn't take care of your property is often not vandalism, but in fact wear and tear. Keep in mind, vandalism is the intentional or deliberate destruction of property, whereas wear and tear occurs over time — and in fact likely will in this mid-term rental space.

So how can you mitigate risks from vandalism, malicious mischief, or theft on a day-to-day basis? Security systems work nicely as a deterrence, as does thorough tenant screening. One area where you might be more susceptible is during a vacancy period — maybe one lease is about to end, you're going to do some renovations, and it's going to be a couple of months before another tenant gets in. Make sure you have plans when that vacancy period is coming. Talk to your agent to ensure that your policy matches the coverages you need. Sometimes vacancy periods that extend beyond 30 to 60 days could impact coverage for theft, vandalism, and malicious mischief. Again, talk to your agent and make sure you have the protection you need.

Understanding the most common insurance claims for your mid-term rentals can help you take the proactive measures you need to prevent them, respond appropriately should a loss occur, or seek out the right protection in the event that you need it. Regular maintenance, thorough tenant screening, and comprehensive insurance coverage are often your best defense for all the losses that we've talked about today. If you have a question or need personalized advice, feel free to reach out to us at Steadily Landlord Insurance, and follow along for more real estate investing tips.