Short Term Vacation Rentals Are On The Rise & Are You Covered?


Vacation RentalShort term vacation rentals are on the rise and for many homeowners looking to rent their property they assume their current homeowners insurance policy will cover them in the event of a claim. What they don’t understand is that by renting their home it’s considered a business activity which is an exclusion and grounds for the insurance company to deny these claims.

When it comes to insuring a vacation rental the owners are faced with a daunting task of trying to find an affordable solution without sacrificing coverage. Insurance carriers such as State Farm, Allstate, American Family, Farmers, and many others don’t have a product to accommodate this growing need so homeowners are left to scour the internet for options. This is where it gets a bit tricky, there’s a handful of brokerage markets that offer coverage however they have a lot of sub-limits and very confusing contracts. I first encountered this dilemma last year with a client who has a property in Flagstaff. My first thought was to contact our several of our Excess & Surplus brokerage markets to see what options are available and to get a quote. Once I started receiving quotes back I really spent some time reading the coverage forms and realized the policies were not what I was comfortable proposing to my client. After a bit more research I found a company which blew the door wide open on coverage, in fact they even extend business income coverage for the Property Management in the event of a covered loss, they extend the additional insured to the Property Management, and to top it off they’re extremely competitive on price.

I’ll wrap this up with one piece of advice, really take the time to review the coverage forms used and verify if the carrier has a vacancy clause and/or length of rental requirements. If you find yourself confused or not sure what your reading (some of these contracts can get pretty wordy)  please give us a call and we would be happy to speak with you.

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    Homebuying: What To Look For When Purchasing


    Home Inspection Report

    After years of hard work, watching the budget, and monitoring credit, consumers then look into purchasing a home of their own. However, there is more to home buying than just filling out paperwork, and consumers need to know a few tips about ownership before moving in. Here are two things to keep in mind:

    • Inspections: Ask about accessing an inspection report from the seller or realtor before moving, if possible. If the report is not available at that time, have a home inspection done by a licensed professional to make sure that the foundation is solid, and the wiring is up to code.
    • Location: Double-check to see if the unit is actually worth the asking price. Check out the neighborhood by visiting parks and businesses at various times of the day and week. See if the streets and buildings are clean and well-maintained. Also, the local police may have crime-mapping websites that show the areas of high activity, and property values are affected based on this information.

    What To Look For When BuyingInspect your home

    Before settling into a new house, the structural soundness and fixtures must be checked for durability and functionality. Enlisting the services of a licensed professional is a good idea in checking for unseen damages, but there are ways to identify problems beforehand.

    • Structural (includes foundation): Random hairline cracks are nothing to worry too much about as long as they are not near appliances and fixtures. Big cracks are a problem, especially near windows, end-of-terrace walls, and where extensions join. These types of cracks may be indicators of rotten woodwork, mold, mildew, bacteria, insect infestation, or water leaks.
    • Roofing: There are other factors to consider besides leaks when checking for roof damage. Look for missing and misplaced roof tiles and if there are gaps in the seams and edges. Most roofs have a life expectancy of only 15 to 20 years, depending on the materials used in construction.
    • Heating and Cooling: Make sure the furnace system is up-to-date and energy efficient. Check units and radiators for leaks and rust for proper operation. When turned on, the unit should quickly heat up or get cold across the surface. Replacement or extensive repair of the unit is required when heating and cooling appliances do not run properly.
    • Water Heater: One of the first signs of a faulty water heater is the presence of cracks in the unit and water leaks (e.g. puddles, streams), Strange noises like banging and gurgling come when operating. Colored, rusty, or cloudy water due to high mineral accumulation also comes out of the unit. Also, slow-moving or non-existent water flow is a sign of unit repair or replacement.
    • Water Damage: Some hidden areas for water damage (mold, mildew, flooding, seepage, etc.) include under the kitchen sink, around the toilet, around the base of appliances that use water like washers and refrigerators, near the ceiling joists, and under the carpet. Strong or musty odors and damp spots on the walls and ceilings are good water damage indicators also.
    • Wiring and Outlets: The sight of loose wires or exposed outlets is not to be taken lightly because they may be live and cause shock or fire. If the lights keep dimming or flickering and the circuit breaker trips often, there is an electrical short. Also, the smell of metal or burnt plastic and buzzing noises are clear signals that loose or faulty wiring is present.
    • Land Area: The house is not the only area to take into account when looking for damages, but the lot the building was placed on could possess hidden dangers as well. See if the ground is level, prone to flooding, has suffered from wildfires, or is prone to sinkholes. The local property records department should have a history of occurrences on the lot.

    Buying a house is most likely going to be the biggest investment for consumers, so using extreme care when reviewing the premises is a good choice before final purchasing transactions are completed.