Timeshares offer travelers an alternative to traditional lodging options like hotels and resorts. If you vacation in a timeshare, it’s more private, you generally have more space, and you have amenities like a kitchen, washer/dryer and dining area.
What Insurance Is Provided by a Timeshare Company?
To find out what your particular timeshare provides for insurance coverage, read your timeshare agreement thoroughly. Coverage will vary among timeshare providers.
For example, annual association maintenance fees for Wyndham Destinations timeshare owners cover property and general liability insurance costs, says Vanessa Picariello, a spokesperson for Wyndham Destinations. This includes the brands Club Wyndham, WorldMark by Wyndham, Shell Vacation Club and Margaritaville Vacation Club.
Wyndham Destinations, as a professional management company, works with the association to manage owners’ insurance needs, Picariello says.
“We have many different types of owners, and some may choose to purchase extra insurance above property and general liability, such as residential unit owners who may wish to purchase a separate policy for furnishings and other belongings, or those who may wish to purchase travel insurance to protect upcoming vacations,” she says.
Basic Insurance for Timeshares
Sean Harper, co-founder and CEO of Kin Insurance, a technology-based home insurance provider, says insurance needs will depend on the type of timeshare ownership you have and how you use the property.
For example, if you have a deeded timeshare, you have a legal title to the property. “That means you can sell it, rent it and you are responsible for protecting it” with insurance, says Harper.
At minimum, you would want both property and liability insurance. “That could be accomplished with the right endorsement to a homeowners insurance policy if you use the timeshare yourself,” Harper says.
Property insurance will reimburse you for the repair or replacement of items that are damaged by a problem covered by the policy, such as a fire or explosion. Liability insurance comes to the rescue if you’re sued, such as a lawsuit by a visitor who is injured in your timeshare and blames you.
Harper notes you may need a commercial landlord policy if you rent out the timeshare.
Timeshare Insurance Considerations
Here are some examples of timeshare issues to plan for.
Building damage: Timeshares, like any other building, can suffer damage due to fire, hurricanes and other disasters. Marika Bastrmajian, a spokesperson for Farmers Insurance, says that because the facility is commercial and not entirely owned by you, a standard homeowners insurance policy typically won’t provide coverage.
Look for deeded timeshare property insurance if you have the title to the property. In other cases, the timeshare company secures coverage on the building itself.
Coverage for belongings: If you have a renters or homeowners insurance policy, you typically have coverage for your personal belongings, even at the timeshare.
But watch out for special limits on theft coverage. A standard home insurance policy, for example, as a $1,500 limit for the theft of jewelry, watches and other items. To get full coverage of valuable items, consider scheduling personal property.
Accidental damage or injury to someone else: If you accidentally damage someone else’s property or injure someone, your liability insurance can pay for repairs or medical bills and even your legal defense if you’re sued.
“Liability coverage includes benefits like medical payments to others, which may pay for reasonable and necessary medical treatment for a person who is injured at the timeshare while there with your permission,” says Bastrmajian.
When in doubt, check with your home insurance agent to get coverage explanations.
Additional Insurance Considerations
An umbrella insurance policy can be a smart choice for a timeshare owner because the property likely has more visitors than a typical vacation home, Harper at Kin Insurance says.
“Umbrella insurance can offer extra liability coverage for a lower cost than increasing the liability limits of your underlying policy,” he says. That will come in handy if you’re sued for an amount above the liability maximum in your base policy. In general you want a total amount of liability insurance that will cover what can be taken from you in a lawsuit.
Title Insurance for Timeshares
A deeded timeshare is an asset and should be protected accordingly. According to timeshare resale platform RedWeek, title insurance guarantees that your timeshare has a clear title that says you are the bonafide owner.
Title insurance is important in case you’re sued over problems that pre-date your ownership, such as undisclosed liens, back tax obligations, overdue and accrued maintenance fees, or any other undeclared or unforeseen issues.
Consider title insurance for a deeded timeshare just as you would when buying a house or condominium, says Gary Prado, a spokesperson for RedWeek. “If a title defect arises after the fact, your ownership rights could be threatened,” he says. “At the very least, it could result in legal expenses to clean up the title, and worst case it could result in the loss of your ownership.”