Owning or renting out a vacation home can generate passive income, but it also comes with the potential issue of squatters. These unauthorized occupants exploit legal loopholes to claim residency in vacant properties, often leading to significant financial burdens from legal fees and property damage.
The problem of squatting is rapidly growing across the United States, causing many homeowners to fear leaving their homes unattended. When faced with squatters, calling the police often results in being advised to contact a lawyer, making the eviction process lengthy and expensive.
What Defines a Squatter?
A squatter is an individual who intentionally occupies another person’s property without authorization or permission, with the intention of residing there indefinitely.
This can include anyone who refuses to leave your rental property despite not paying rent, having an expired lease or rental agreement, or violating the terms of that agreement. Sometimes, you may not have rented to them at all. Squatting often occurs as a crime of opportunity when someone seeks a place to stay and illegally enters and occupies a rental property. Many squatters are savvy scam artists who understand property laws and exploit them. Nowadays, many squatters deliberately overstay their welcome at a rental property without the owner’s consent.
Insurance for Squatters
Many homeowners turn to their insurance companies for assistance. Online searches for “squatter insurance” and “squatters coverage” are more frequent than ever. This leads to questions such as: Where can homeowners buy squatter insurance? Does such coverage even exist, and what does it include?
A squatters insurance policy can potentially protect against various types of losses—if you can find an insurer willing to provide it. These losses include:
- Lost income
- Legal expenses
- Court costs
- Sheriff fees
- Property damage
- Property turnover costs
Where to Purchase Squatter Insurance for Your Home
We contacted several major insurance companies regarding squatter insurance but found no success. It appears that insurance companies are very hesitant to include squatters coverage in their homeowners insurance policies.
Proper Insurance – Squatter Protection Coverage
Currently, only a few insurance companies offer squatter insurance, but Proper Insurance has introduced a unique policy that can be added to your existing coverage for a small additional premium or included for new customers as part of their initial policy setup.
Proper Insurance’s squatter coverage focuses on two main areas: compensation for lost rental income and coverage for legal expenses.
$10,000 for lost rental income
$5,000 for legal fees
Since the eviction process for a squatter can last between 30 and 90 days, during which you will not receive rent and will incur legal costs, Proper Insurance provides up to $10,000 to cover lost rental income and help manage the financial strain of this situation.
Handling squatters also involves significant legal expenses, as navigating tenant rights and squatting laws can be complex and costly. Proper’s Squatter Insurance offers up to $5,000 to help cover these legal fees, allowing you to promptly seek legal assistance or hire an attorney to remove the squatter as efficiently as possible. Proper’s innovative short-term rental insurance solution addresses a common issue for homeowners, providing you with peace of mind and protection against the challenges posed by squatters.
To learn more about how Proper can help you protect your rental income, call 888-631-6680. This unique insurance coverage is a valuable resource for safeguarding your property investment.
What Protections Does Squatter Insurance Provide
Let’s explore how a squatters insurance policy can safeguard you and your property.
Income Loss
Removing a squatter from your property can take anywhere from 60 to 90 days, during which time you won’t be able to rent out your vacation home. The potential loss of rental income from this process can be one of the biggest costs of dealing with a squatter. An anti-squatting insurance policy can help recover this lost income while you go through the eviction process. Since this process is often drawn-out and stressful, every day a squatter stays in your home is a missed opportunity for rental income.
Legal Costs
Additionally, when dealing with tenants who won’t leave or fail to pay rent, you might need legal help to enforce their removal. Attorneys typically charge significant hourly fees, which can become quite expensive. Having an anti-squatting insurance policy can help cover some of these legal costs if you end up needing legal representation.
Court-Related Costs
Beyond the legal fees for hiring a lawyer, you may also face various court costs for the necessary filings to evict a squatter from your property. These fees can vary from state to state, but a squatter insurance policy can assist with covering some of these expenses as you work to rent out your vacation home again.
Fees for Sheriff Services
If you decide to proceed with an eviction, you will likely need to involve your local sheriff’s office to deliver the official eviction notice. Trying to evict a squatter on your own is not advisable. Additionally, local law enforcement will only act to remove a squatter after you have received a favorable court ruling. Depending on your location, you may need to present the court’s decision to law enforcement, or some officials might handle the removal as soon as the decision is made. It’s important to check in advance what steps are required and be prepared for any associated service fees.
Damage to Your Property
When unauthorized occupants stay in your property, they might cause damage during their time there. Without a squatter insurance policy, you are responsible for covering the costs of repairs for any damage they cause, which may involve hiring contractors and managing the repair process.
In addition to losing rental income while repairs are underway, you might incur costs for cleaning the property after a squatter’s departure. Evicted individuals typically do not leave the place clean, so you will likely need to handle this expense. Furthermore, you may need to deal with any remaining personal belongings, which could involve storage or disposal of items, including electronics and bulky or hazardous materials, according to local regulations.
Costs Associated with Getting the Property Ready for the Next Rental
After evicting a squatter and finishing any required repairs, you’ll need to re-rent your property to recover lost income. This process comes with its own costs, such as advertising your vacation rental and covering HOA fees or property management expenses that would normally be covered by rent. Estimates suggest that property turnover costs can reach approximately $1,750.
What Are the Legal Rights of Squatters?
Squatters’ Rights refer to adverse possession laws, which differ from state to state. These laws permit a squatter to occupy and use someone else’s property as long as the legal owner does not take action, including eviction. Essentially, these laws allow a squatter who openly and visibly lives on the property for a certain period to potentially claim legal ownership. Although it may seem surprising, these laws are designed to prevent properties from remaining unused for extended periods.
Squatters’ Rights refer to adverse possession laws, which differ from state to state. These laws permit a squatter to occupy and use someone else’s property as long as the legal owner does not take action, including eviction. Essentially, these laws allow a squatter who openly and visibly lives on the property for a certain period to potentially claim legal ownership. Although it may seem surprising, these laws are designed to prevent properties from remaining unused for extended periods.
Unlike others, a squatter deliberately occupies your property with the aim of remaining there long enough to achieve legal tenant status.
How Should I Handle the Situation If a Squatter Occupies My Property?
If you suspect that a squatter is on your property, it’s crucial to take prompt action. Additionally, if you have a squatter-prevention insurance policy, you should contact your insurance company right away to report the issue and potentially file a claim.
Submit a Writ of Possession
The first action to take for removing a squatter is to file a writ of possession or an unlawful detainer. This approach is particularly effective against squatters who attempt to gain tenant status. You must prove that there is no current lease agreement or that the former lease has expired to show that the squatter has no legal right to occupy the property.
Consult a Lawyer
At this stage, it’s advisable to consult with a lawyer who specializes in eviction cases. A knowledgeable attorney can guide you through the legal process and help you remove the squatter from your property as quickly as possible. They can initiate formal eviction procedures by officially notifying the squatter that they are unauthorized to stay on the property and must leave. Be sure to keep thorough records of all interactions with the squatter, including your original rental agreement, any communications through platforms like Airbnb, and any relevant texts, emails, or photos. These documents could be crucial for your insurance claim or any legal actions you might take.
Watch for Red Flags
Keep an eye out for potential red flags when renting out your vacation property. People who plan to stay long-term often display specific behaviors. For example, be wary of renters who have incomplete profiles or who created their profiles shortly before reaching out to you. These could be indicators of a squatter trying to exploit your rental opportunity.
Only Accept Verified Renters
Avoid renting to individuals who have received negative feedback or low ratings from previous property owners or hosts. It’s wise to only accept reservations from Airbnb renters who have a verified badge on their profile. Additionally, be cautious of potential renters who openly express a desire to stay for more than 30 days, as this could indicate potential issues.
Conduct a Background Check
To add an extra layer of security, consider using verification services like Safely.com to screen for convicted felons and renters with a history of property damage. Additionally, having renters sign a clear short-term rental agreement can help strengthen your legal position if you need to pursue an eviction. While this step won’t completely prevent squatting, it can make your case stronger if legal action becomes necessary.
Ask for a Security Deposit
Charging a security deposit can be a useful measure to protect against squatters. Since those looking to stay beyond their rental term without authorization are generally unwilling to pay a significant deposit they can’t get back, this step can help deter them from trying to exploit your property.