Renters Beware: Things to Consider When Renting Your Property
While renting out your home is not a new concept, the recent popularity surge in short-term rentals has taken this idea to the next level. Many of the short term rentals in our area are focused on seasonal and cottage properties. Renting your cottage can be an effective way to earn some extra money, but it’s not risk-free and you need to be cautious.To be clear, renting your home out to a year-round tenant and renting your seasonal home out for a weekend are two very different ventures. The reality is that most weekend cottage rental owners have serious insurance issues. When you have multiple paid guests coming and going in one season, the line between landlord and commercial tourist resort becomes blurred, and more red-tape is involved. Working with a professional insurance broker will ensure that you are properly covered and help you have a positive rental experience every time.
Although cottages and camps on a lake are a perfect weekend destination for a renter, they bring an increased risk of exposure and require a greater duty of care in comparison to an average dwelling. Some of these risk factors include:
- Docks & decks
- Steep inclines & slippery surfaces
- Shallow water
These normal cottage situations are all common pitfalls that your guests need to be made aware of. Make sure the house rules are abundantly clear for areas or items that are off limits, such as fire pits. If your guests will have access to watercraft, we strongly recommend coverage that is separate from and in addition to, the coverage for your dwelling.
Whether your occupiers are weekend guests, tenants, or friends and family, it makes no difference to the law; as the property owner/landlord you are subject to the Occupiers’ Liability Act. This means that you have a duty to maintain the premises in a reasonably safe condition, and that you will be held accountable for the actions and consequences that may arise from your guests stay. For landlords and renters, this a stark reminder that it is in their best interest to work with an insurance broker who will ensure that they are thoroughly protected.
Before you rent out your seasonal dwelling, you must inform your insurer about your plans including the frequency and duration of the rental terms. Most insurance policies do not cover this exposure, and some particular coverages are excluded when you have tenants, such as vandalism. An oversight in doing so could mean that your insurer will deny future claims due to a material changes in the risk. It’s especially important to talk to your broker to make sure you have adequate insurance protection that covers you for renting out your seasonal residence short-term, and to consider the increased duty of care required and if it is in line with your comfort level of risk exposure.
There are affordable insurance products available to provide protection and extend your policy for as little as two weeks of rental and even up to a full year round rental. If you have any questions or for more information, contact one of our expert advisers today.