Once you have committed to purchasing a timeshare, there are a number of insurance related questions that are important to consider to make sure that you have the proper coverage for the unit that you purchase. What insurance policy makes sense will depend a lot on the type of timeshare that you purchase. Here are a few basics that you need to know about timeshare insurance:
With a deeded ownership, a timeshare is comparable to buying a home for insurance purposes. The county where the unit is built will record you as the owner of the unit. As the deeded owner, you will have the ability to rent, sell and even donate your timeshare. The key difference between it and a regular home is that you are only owner of the unit for the time period (usually a week or two) which you purchased. During the rest of the year, the unit will be used by other owners who purchased those specific weeks.
Since the timeshare may have had a number of owners over the years, the first type of insurance you will want to make sure you have is title insurance to protect your interests in the unit. While the timeshare resort should provide the title insurance when you purchase your unit, it's important to verify and confirm that this is the case because it might not be the case in all instances. If the resort doesn't provide title insurance, it's important that you make arrangements to get it.
In addition to title insurance, you will want to have deeded timeshare property insurance which includes fire, vandalism and other typical losses. In many instances, the timeshare resort will offer this property insurance, but you don't necessarily want to purchase it through your resort. It's important to read the policy that is offered, find out the cost and exactly what it covers. There is a good chance that you can purchase deeded timeshare insurance online that gives better comprehensive coverage for less money. As with most insurance products, it pays to shop around.
Right To Use
In addition to deeded timeshares, some resorts offer right-to-use units for purchase. A right-to-use unit is similar to renting or leasing the unit with the difference being that the contract is for a specific number of years. While you do not have any ownership interest in the unit, you can rent or transfer the rights to use the unit to others.
In this instance it's the resort or management company that owns the property and not you. This means that the resort typically is responsible for insuring the property. This will not make the insurance free to you. The cost of this insurance is usually passed onto you through maintenance fees. The important research you must do is to find out exactly what the timeshare resort's insurance covers because it could very well leave you liable for some situations such as someone getting injured while in your unit or your personal contents may not be covered from theft. For this reason it's important to understand any limitations or exclusions so that you can purchase additional insurance if needed.
Another type of timeshare that can be purchased are timeshare points. These are usually called vacation club memberships that allow you to use the points that you have at any of the resorts which are part of the vacation club. Much like right-to-use units, the property insurance coverage falls on the vacation club management or the resort's developer. Again, it's important to take the time to understand all limitations and exclusions of the insurance to ascertain if additional insurance is needed.
Renting Your Unit
If at some point you make the decision to rent your timeshare unit to others, you'll want to make sure that you have insurance which will cover any damages that the renters might cause. If you fail to get this insurance, you will likely be fully responsible to pay for all damage they cause. There are a couple of insurance options to consider and decide which makes the most sense for your situation. First, it might be possible to add coverage as a rider to your regular homeowner's insurance policy. Another option would be to purchase a landlord's or co-owner insurance policy.
submitted by Sara in G'boro