Condotel Insurance
What is a condotel?
A condotel is a building of individually owned condo units that runs like a hotel. You own your unit. When you’re not using it, you can place it in the resort’s rental program, where the operator books guests, cleans, and handles check-in, and you share in the rental income. Several operate near Orlando’s theme parks, and others along Florida’s coast.
It’s a good way to own a vacation property without running a vacation rental. It’s also one of the harder things in residential insurance to place.
Why is condotel insurance hard to find?
Most homeowners and condo carriers either don’t allow vacation rental use at all or don’t insure condotel units. A condo policy is written for a unit you live in. A short-term rental policy is usually written for a home you or your manager operate. A condotel unit is neither: it’s a condo, it’s rented nightly, and a hotel operator you don’t control is running the rentals.
That leaves a smaller group of carriers willing to write the unit, and it’s why working with an agency that knows the niche matters.
What does a condotel unit owner need to insure?
The pieces look like a condo policy with a rental use layered on. Exactly what you need depends on the building’s documents and the rental program agreement.
- The unit interior: whatever the association’s master policy leaves to owners: typically flooring, cabinets, fixtures, and improvements.
- Furnishings and contents: in a condotel you often own the furniture, linens, and kitchen items the rental program requires. That’s business property in a rented unit, and it needs a limit that reflects what it would cost to replace.
- Liability: guests in your unit are paying guests. The operator carries its own insurance for its operations, but claims can still name the unit owner.
- Loss of rental income: if a covered loss takes your unit out of the rental pool, lost rental income coverage, where the policy includes it, can replace the income you would have earned. Expect to document it with the program’s rental statements.
- Loss assessment: a condotel is still a condominium. If the building’s master policy has a large hurricane deductible, owners can be assessed for it.
- Wind and flood: in Florida, check both. Flood is excluded from standard policies and is bought separately.
Read the rental program agreement before you buy coverage
Most condotel rental programs spell out insurance requirements for owners who put their units in the pool. Common ones:
- A minimum liability limit for the unit
- Naming the operator or the association as an additional insured
- Proof of coverage each year, sometimes through the operator
Some resorts arrange a program policy for owners, and some leave it to each owner. Either way, the agreement is the document that decides what you need. Send it to your agent with your quote request.
Condotel vs. condo vs. short-term rental insurance
| Condo (HO-6) | Short-term rental | Condotel | |
|---|---|---|---|
| Who uses the unit | You | Guests you or your manager book | Guests the resort operator books |
| Who runs the rentals | Nobody | You or your property manager | The hotel operator |
| Typical policy | HO-6 | Short-term rental policy | Specialty unit-owner policy with rental use |
If your unit is a regular condo that you rent out yourself, see condo insurance and short-term rental insurance instead.
Condotel insurance FAQ
Does the resort’s insurance cover my unit?
Usually only part of it. The association’s master policy covers the building and common areas, and the operator’s policies cover its own operations. Your unit’s interior, your furnishings, your liability as an owner, and your lost rental income generally fall to you. Check the building documents and the rental program agreement to see where the line sits in your resort.
Can I use my unit personally and still rent it through the program?
Most programs allow owner stays. Tell your agent how you split personal use and rental use, because the policy should be written for how the unit is used.
Is condotel insurance more expensive than condo insurance?
It usually costs more than an HO-6 for a unit you live in, because nightly rental use carries more risk. Location, building age, wind exposure, and the limits the rental program requires all move the price.
Why use Fudge for condotel insurance?
Fudge Insurance is an independent Florida agency with a deep specialty in short-term and vacation rental insurance, and condotel units are part of that niche. We shop the carriers that will write them, and we can read the rental program agreement with you so your coverage matches what the program requires.
Buying into a condotel resort, or already own a unit in a rental program? Send us the program agreement and ask for a quote.
Request a quote today!
We would be happy to quote your condotel insurance needs.
