Short-term rental insurance, also known as vacation rental insurance, offers specific protection for home-share arrangements. Not only can these policies protect against property damage and offer you liability coverage, but they may also include appropriate coverage for amenities or equipment rental you offer. Coverage may also include loss of use or loss of income protection in the event damage makes the property uninhabitable and unrentable. Depending on the policy, it may be available for those who rent their homes for a very short period of time, such as a week or weekend, or those who rent it for a season.
The bottom line is that finding insurance coverage for your property and situation can get confusing as there are so many different options, exclusions, and endorsements available. Choosing the wrong insurance can at best cost more than necessary and at worst leave you without coverage for a catastrophic loss. That’s why getting help in finding short-term rental coverage is essential.
Q. What is considered short-term renting?
A. In the insurance world, a property that is rented for less than 30 days at a time is typically considered short-term. Short-term can also refer to a property in which the renter does not reside/live at the dwelling.
Q. Why does my homeowner’s policy not cover my short-term rental?
A. All homeowner’s policies carry a “business activity exclusion”. In other words, any claim involving a “business activity” could rightfully be denied.
Q. Is my short-term rental really a business?
A. Yes. Most cities are now requiring short-term rental owners to carry a business license and carry $1,000,000 in commercial liability. Communities are also putting in requirements for occupancy tax collection, like a hotel. None of these requirements exist for a long-term lease rental.
Q. How do I get covered for business activity?
A. You buy a business insurance policy. The Insurance policy we recommend is a business policy. It covers your business property (rental home/contents), business liability, and the business income it generates.
Q. If I insure my short-term rental as a business, can I also stay there?
A. Yes. There are no standard occupancy restrictions on a business policy. This means the property is insured while you stay there, friends/family, and of course paying guests.
Q. Can I purchase short-term rental insurance if the dwelling is also my primary residence?
A. Yes. If the short-term rental home is also your primary residence, the policy we recommend simply adds $1,000,000 in personal liability and $50,000 in loss of use to relocate in the event the property is being rebuilt. This is very important if you do not carry a homeowner’s policy elsewhere.
Q. What if I also live at the short-term rental, can I still insure it as a short-term rental?
A. Yes. You have the same business exposure. We see every scenario imaginable. You live upstairs and short-term rent the downstairs. You live in the main home and rent out the guest house, etc.
Q. If I purchase a short-term rental policy, do I keep my homeowner’s or landlord policy in place?
A. No. The policy we recommend is designed to fully replace the current coverage you have. You would cancel your current policy.
