By Jim Donovan
PHILADELPHIA (CBS) – Thousands of people are converging on the Jersey Shore this holiday weekend to enjoy much needed rest and relaxation, with many planning to stay all summer. For some who rent homes year-in and year-out, there may be a new cost to figure into the equation. 3 On Your Side consumer reporter Jim Donovan explains.
In Ocean City this summer, vacationers will enjoy the same sun, the same surf, but if you’re renting a house, you could face a new charge.
“We got to a point where the conventional security deposit wasn’t working properly,” said Clay Rossiter with Fox Real Estate in Ocean City.
Enter what’s being called a vacation damage rental plan, where you pay an optional insurance fee instead of a security deposit you get back.
“I think a lot of people were inclined to try and hide any damage that maybe were to happen,” said Rossiter.
Rossiter says renters won’t need to cover up that stain on a rug, or hide any chipped items.
“If something happens, spills, breaks we understand and now you’re insured. You just give me a call, we’ll fill out the forms and send it in and submit it to the company,” said Rossiter.
At Fox the $50 insurance premium gives renters $1,500 worth of damage coverage.
Sounds good to homeowner Julie Toner.
“My understanding is it will encourage people to report damage sooner. So if it works, if it works as they say it will I have no problem,” said Toner.
“This is something that is offered in other places across the country, this is something that is just newer in New Jersey,” said Frank Shoemaker with Berger Realty in Ocean City.
Shoemaker says his agency is offering the rental insurance too. A $50 buck policy for $3,000 of coverage.
“I think most people would rather just pay the 50 dollars and have the insurance policy coverage rather than having three, four, five hundred dollars tied up for essentially for two months and you’re still not guaranteed that back in case you did some damage to the property,” said Shoemaker.
Renters do have a choice, but here’s the catch. If you opt to put down a security deposit instead of paying for the $50 insurance policy, in many cases the security fees will be triple, or quadruple what it used to be. While Ocean City realtors are embracing these insurance policies, realtors in a few other shore towns have introduced them too. It’s appears to be the wave of the future.