So you’re thinking about buying a timeshare. It can be a great way to enjoy a posh vacation at a bargain price. Whether you go for the beachfront resort or the ski chalet, be sure your vacation ownership experience remains positive. Protect your good times with the proper insurance coverage. Here’s what you need to know about timeshare insurance.
There are three basic types of timeshare and the type of insurance you need will depend on which type of timeshare you purchase.
- Deeded ownership is just like buying a home. You are the owner of record in the county where your timeshare is built. As with any other type of deeded real estate, you can sell, rent, donate or bequeath your timeshare. The difference is that you are sharing your unit with other people and only occupying it yourself for a few weeks a year. Because the property may have changed owners several times over the years, you will want title insurance to protect your interests. Typically, title insurance should be covered by the timeshare company from whom you are purchasing. Don’t assume it is. When you’re considering a purchase of a deeded timeshare unit, be sure to ask about title insurance. For actual property insurance for a timeshare to provide coverage for fire, vandalism and similar losses, you will need deeded timeshare property insurance. Often this coverage is available through the timeshare company, but you can also shop for deeded timeshare quotes online and take advantage of competitive pricing on comprehensive coverage that includes contents and liability. Look for an annual timeshare policy that covers you whenever you visit.
- Right to use timeshares are akin to renting or leasing a vacation property, except that it is for a specific number of years. You have no ownership interest, but you can rent, transfer or bequeath your right to use. You’re likely to find this type of timeshare in states that don’t allow deeded ownership timeshares. Because the developer or timeshare management company typically retains ownership of the actual property, it is their responsibility to insure the property (although they may pass some of the cost on to you as a maintenance fee.) This does not necessarily mean that the contents are covered or that you aren’t liable if a friend is injured while inside your timeshare. Ask to review the property policy to determine the limitations and exclusions.
- Points timeshares are usually offered as vacation club memberships. Insurance coverage will vary but it is typically the club management’s or developer’s responsibility.
If you rent your timeshare to others, you need to be certain your insurance covers damages they might cause. You may be able to add this coverage as a rider on your regular homeowner’s policy. Or you may be better advised to take out a landlord’s or co-owner policy.