Do I need to get insurance for my vacation home before renting it out?

Know what type of insurance is necessary and how to protect your temporarily rented property.

Renting out a holiday home, whether during the summer or throughout the year, is an excellent way to make your property profitable. But before doing so, it is essential to ensure that the house is properly protected.  

Having insurance is not only advisable, but it can also be mandatory depending on the type of lease and the legal framework.

Is multi-risk insurance mandatory?

If you have a mortgage on the property, it is very likely that you already have a mandatory multi-risk insurance required by banks. This insurance essentially protects the structure of the building (the so-called "common part", in the case of apartments).

However, this insurance may not cover damages caused by tenants or guests, if you do not have third party liability, which can be a risk in short term rentals.

Read more: How does a multi-risk insurance work?

And if it's Local Lodging (AL)?

If the vacation home is registered as Local Lodging (AL), the law requires the hiring of a civil liability insurance that covers damages caused to guests and third parties.

This insurance may include:  

• Damage caused by accidents on the property.  

• Compensation for damages caused by guests;  

• Legal costs in case of litigation.

Some insurance companies already offer specific insurance for AL, which also includes protection of household contents and 24-hour assistance.

What are the risks of not having insurance?

Without proper insurance, any damage caused by guests - such as fires, floods, thefts or accidents - will have to be assumed by you, potentially leading to high costs or even legal processes.  

In addition, in case of a serious claim, you may lose rental income.  

What should I include in insurance?

When looking for insurance for your rented vacation home, make sure it includes: 

• Property and contents coverage;  

• Civil responsibility;

• Coverage of risks associated with short-term rentals.

• Assistance in the property.

If you are thinking of renting out your holiday home, don't take any risks. Adequate insurance protects your property, belongings, and peace of mind. In many cases, it is a legal requirement - and in all cases, it is a sensible decision if you do not want to take financial risks.

Want to hire the insurance? The insurance mediators from Poupança no Minuto can take care of everything for you at no cost and without you having to worry about anything! Save yourself from the bureaucracy, small print, and headaches: Contact us now and start the process today.