Freisenbruch-Meyer Group (FMG) has come up with a new insurance policy specifically to cover the risks of the growing vacation rentals sector.

The rise to prominence of websites such as Airbnb.com has fuelled the rise in the number of people renting out apartments and homes to visitors.

Bermuda is no exception to this trend. The website, bermudarentals.com, had 125 properties listed for rent, when viewed yesterday.

According to Bermuda Tourism Authority statistics, 23,197 visitors stayed in private homes last year, up by 1,857, or 11 per cent, on the same period in 2013. That number does not include visitors who stay with relatives or friends on the Island.

Damian Pitcher, senior underwriter, commercial lines, at FMG, came up with the idea of creating the new policy to fill a gap in coverage.

“We offer guest house cover and home cover, but we’ve had a few inbetween clients, who don’t fit into either,” Mr Pitcher said. “So it made sense to offer a hybrid policy.”

HomeCover Plus is the result. The policy provides standard home insurance, as well as coverage for many of the risks associated with having someone else stay in your property. Previously, this would have required two separate policies.

As Heidi Grant, vice-president, commercial lines, at FMG, explained: “When you rent out your home, it’s a business activity that is not covered by standard home insurance.

“If a guest were to fall over a turned-up rug and hurt themselves, for example, then they could bring a suit against the owner and there would be no coverage from standard home insurance.”

The new policy provides $1 million in liability coverage if guests are injured on the property and the owner is held legally liable. It also insures against accidental damage by paying guests to audio or visual equipment, glass, or external signs or blinds. It also covers damage to or loss of a guest’s property while staying in the rental unit and theft of the guest’s money, provided it was held in a locked safe.

Mr Pitcher said renters were also sometimes hit financially by the weather. The policy insures the loss of rental income in the case of bookings having to be cancelled because damage caused by a storm made the property unavailable.

“We saw this after Hurricane Gonzalo,” Mr Pitcher said, referring to last October’s category three direct hit. “Some people took two months to get up and running again.”

While most rentals pass off according to plan, irresponsible tenants have been known to steal or deliberately cause damage in the property. That is a risk the new policy does not cover, though as Ms Grant said, the rental agreement should hold the tenant liable in such an instance.

Some customers have already signed up for the coverage, ahead of the new offering’s official launch yesterday. FMG will also be promoting the product this weekend at the Coldwell Banker Home Show, which starts tomorrow at 3pm at CedarBridge Academy.