Protect Your Condo Investment With Proper Coverage

Commercial
// December 5, 2019
Reading Time: 3 minutes

As more and more travelers forgo the traditional hotel experience in favor of companies such as Airbnb and VRBO, the demand for short-term vacation-rental condominiums continues to rise — and the trend has turned condos into a hot ticket item for property investors. Rightfully so: By 2020, vacation rentals are expected to topple the hotel industry.

Current vacation trends suggest millennials make up a large group of travelers who are spending more on experiences rather than possessions. This group prefers short-term condo stays over hotels because they can choose from a wider variety of locations and typically have access to a full kitchen.

According to Homesgofast.com, the vacation rental industry is expected to be worth $170 billion by the end of 2019. Many think of beach vacations when they hear condo investment properties, but there are plenty of other investment opportunities, such as units at ski resorts and units in close proximity to professional sports arenas across the nation.

Condo unit owners enjoy the luxury of not having to deal with traditional home maintenance such as mowing the lawn, fixing a roof or shoveling snow. These characteristics of owning a residential condo make it ideal for buyers who seek low overhead and do not wish to spend much time maintaining their property. However, unlike the traditional single-family dwelling investor, condo unit owners have unique exposures that require a thoughtful, thorough insurance policy.

Consider the following claims examples:

  • Your insured rents their ski resort condo to a family for the weekend. One of the children trips over a lamp’s electrical cord and breaks their arm. The parents sue the insured for medical payments and a failure to maintain a safe environment, and the insured incurs a claim of $6,400.
  • A guest trips and falls on a condo building’s outdoor patio area, injuring her leg. She sues the condominium association for medical expenses, and the association’s general liability policy responds. However, the association has a $10,000 general liability deductible that is assessed to all owners, requiring each owner to pay $1,000.

Some carriers rate condos using a dwelling class code as well as use industry-standard coverage forms. USLI’s Residential Condo Investors product is specifically designed to meet the unique characteristics of condo ownership and uses tailored coverage forms that satisfy these specialized needs. Notable product advantages include:

  • Loss assessment coverage for both property and general liability
  • No minimum rental period as long as the entire unit is rented at a time
  • Property coverage available on special cause of loss and replacement cost, with no requirements for building or roof age
  • Unrestricted theft coverage
  • Up to $1 million in property coverage per unit, $3 million per building/complex
  • Third-party water damage coverage available

Common characteristics that make a unit ineligible for coverage are student tenants, owner-occupied for the majority of the year and wood-burning stoves.

Quote your condos quickly online, over the phone or by sending an application to your USLI underwriter. We have the ability to schedule up to 50 locations/units when packaging property and general liability and up to 100 units for monoline general liability.

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As always, thank you for your support and business.

Contact Alexis Connolly
Product Leader | 888-523-5545, ext. 2758

Written by Elizabeth Shults
December 5, 2019

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Commercial