What Your Clients Need to Know About Vacation Rentals

Muskoka chairs on a wooden dock

Vacation rental homes have risen in popularity in recent years because they offer travelers a lodging experience that’s unique and yet still personal. However, these vacation homes come with distinct considerations and insurance needs, and insurance brokers are tasked with educating the owners of these homes on the best ways to protect their assets. 

Just like traditional homeowners’ insurance, vacation home insurance is a type of personal lines insurance. In this article, we’ll explore what your clients need to know about vacation rentals, including the nature of vacation homes, potential liabilities, and how partnering with Cochrane & Company can provide insurance solutions to meet their needs. 

Understanding the Insurance Requirements for Vacation Homes

Vacation homes, also known as vacation rentals, are properties that are rented out to vacationers on a short-term basis. They can include condominiums, cabins, or even more unique accommodation options such as treehouses and yachts. 

Vacation homes have different insurance requirements than traditional homes because the people that own these homes aren’t the ones occupying them most of the time. Instead, vacation rentals are, for the most part, occupied by guests, increasing the risks associated with property damage, theft, and liability. 

As such, it’s critical that your clients who own vacation homes obtain vacation home insurance, which is a type of homeowners’ insurance policy that covers a home that people own but don’t live in full-time. Because the owners do not live in the property full-time, a vacation home insurance policy differs from traditional homeowners’ insurance. Instead of covering all the risks and outcomes that a typical homeowner policy might, a vacation home insurance policy might be built around certain named perils and potential liabilities instead. 

It’s important to educate your clients about the unique nature of vacation homes and their accompanying insurance considerations, including those outlined below. 

Potential liabilities

Every vacation rental will have different associated risks, and the specific levels of these risks will vary from property to property. As an insurance broker, it’s your responsibility to emphasize the need for liability coverage that will specifically address each vacation rental’s unique risks.

Potential liabilities include:

  • Accidental damage: Guests may accidentally damage owners’ property. 
  • Loss of income or rent: Owners may lose income due to damage caused by a flood, storm, or fire. Some policies only cover income from bookings that have already been made, so it’s important to check. 
  • Alternative accommodations: If the property is damaged or uninhabitable, then owners have to find guests alternative accommodations. 
  • Fire and smoke: Accidents can happen when guests do things such as light candles or use the stove or fireplace. 
  • Natural phenomena: This includes occurrences such as flooding, lightning strikes, and tornadoes. 
  • Explosions: Explosions may occur for a number of reasons, such as gas leaks.
  • Theft: Guests may pocket items, but there is also the risk of vacation homes being burgled, as they aren’t occupied full-time. 
  • Vandalism: The lack of full-time occupants can mean an increased risk of acts of vandalism. 
  • Public liability insurance: If guests are injured on the property, they may take legal action. 
  • Employer’s liability insurance: Employees such as gardeners or cleaners may get injured on the property while working and take legal action. 
  • Emergency travel: Owners may have to travel to their vacation home to sort out emergencies such as a burst pipe. 
  • Legal expenses: Legal costs can arise in the event of any number of factors. 


There are also some exclusions to vacation home policies, as with any policy. Examples include:

  • Extended lets
  • Stag and hen parties
  • Properties with a certain number of bedrooms
  • Pet-related damage

Additional Coverage Considerations

  • Loss of use coverage is an essential component of vacation home insurance. It replaces lost rental income as a result of property damage that renders the vacation home uninhabitable. Suppose a covered peril, like a fire or a severe storm, damages the property to the extent that it cannot be rented out to guests. In that case, loss of use coverage will help the vacation rental owner recoup the lost income during the repair and restoration period.
  • Apart from the primary vacation home insurance policy, it’s crucial for your clients to consider excess or umbrella insurance coverage. These additional policies provide extra liability protection beyond the limits of their standard vacation home insurance. This is especially important for vacation rental owners who may face higher liability risks due to the nature of short-term rentals.

Cochrane & Company: Your Insurance Solutions Partner

It’s easy to see how finding insurance policies that suit a certain vacation home perfectly can be maddening. Why not make it easy?

Partnering with Cochrane & Company can provide you with the insurance solutions necessary to meet your clients’ vacation rental insurance needs.  Cochrane understands the unique risks associated with vacation homes and offers comprehensive insurance products tailored to address them. 

By working with Cochrane, you gain access to a range of personal lines insurance options that provide coverage for vacation rental properties. Cochrane & Company’s expertise in the industry ensures that you can provide your clients with the right insurance solutions to protect their vacation homes and their financial well-being.

Unique Insurance for Unique Properties

Clients who own vacation rental properties need to be aware of the unique insurance considerations and potential liabilities associated with them. You must educate your clients about the specific insurance requirements for vacation homes, including the need for liability coverage and protection against property damage. With Cochrane’s expertise in the industry and tailored coverage options, you will find the ideal partner to provide comprehensive coverage for your clients’ vacation homes. 

Don’t miss out on the opportunity to secure personal lines insurance for your clients’ vacation rentals. Partner with us today and deliver the insurance protection that your clients need. 

Contact Cochrane & Company to learn more about insurance solutions and start offering personal lines coverage for vacation rental properties to your clients.


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