Rental Property Cover VS Alternative Accommodation Cover

Rental Property Cover VS Alternative Accommodation Cover

As more homeowners turn to short-term rentals or Bed and Breakfasts, it’s important to understand the potential risks and insurance implications. Guests don’t have a sense of ownership or attachment to rental property or its contents, making the risk of damage or loss much higher. That’s why our MUA Executive Policy provides limited coverage for building(s) primarily used for short-term rentals and B&Bs, under the optional extension, Rental Property, that the insured must select at additional premium.

The need of the insured must be assessed to decide if the limited cover is appropriate in comparison to commercial insurance cover. Personal lines insurance policies may not appropriately cover such situations, leaving homeowners vulnerable to excessive claims for injuries to their guests or loss of rental income.

Please be aware that the MUA Executive Policy, Rental Property extension, does not cover refunds for reservations, cancellation fees payable by paying guests, or loss of income. This is excluded from cover under the extension.

When the insured has a long-term tenant in a property for domestic use, the Rental Property extension may not be required. Again, this depends on the needs of the insured and the Alternative Accommodation automatic extension may be appropriate for the situation.

Unexpected damage to a home can be stressful and disruptive. That’s why we offer coverage for alternative accommodation or loss of rent when the insured building is not fit to live in or access to a building(s) is prohibited. The Alternative Accommodation extension provides peace of mind to the insured living in the building(s) at such time and are misplaced due to the damage. The cover for loss of rental income under these circumstances will be enjoyed when the building(s) was utilised for domestic life by the long-term tenant with a lease agreement and the loss of rental income to the insured, is the benefit. The qualifying consideration is the “use” of the building(s) should primarily be for domestic life.

The policy covers in both instances are to the benefit of the insured. In other words, the insured must have suffered a financial loss. There is no benefit under these policy covers for a third party.