Homeowners who are considering renting out a portion of their home on platforms like Airbnb and VRBO should know about the benefits of short-term rental insurance to help cover any accidents that may occur while guests are staying at your property. Here’s a quick peek at the basics you need to keep in mind.
Homeowner’s Policies vs. Vacation Rental
While you may think your homeowner’s insurance policy on your house is enough to cover you in the case of an accident or vandalism that is not true. Homeowner’s insurance is designed to cover you and your immediate family and any short-term guests onto your property.
Not carrying short-term insurance for your rental could be illegal in some counties across the US. Homeowner’s insurance specifies that it does not cover rentals, which is why you need a separate policy for coverage.
What Does Short-Term Rental Insurance Cover?
Renters insurance is designed to protect a home that is primarily occupied by tenants, rather than the landlord. Short-term rental insurance applies to situations like Airbnb and VRBO, where landlords temporarily lease the home to someone else for days or weeks at a time instead of months. This type of insurance protects the landlord in the event of a lawsuit and usually covers damages that may be caused by guests.
However, you should be aware of the differences between occasional hosting and what is considered a commercial activity. Most insurance companies define occasional hosting as having temporary guests in the home for fewer than 90 days per year. Any more than that and the hosting can be classified as a commercial activity, which is not included in most renter’s policies.
Host Protection Insurance
It is worth noting that Airbnb offers Host Protection Insurance that covers damages and liability coverage of up to $1 million for third-party bodily injury or property damage claims. This covers occasions where a guest may accidentally hurt themselves and file a lawsuit against the landlord. This insurance also covers property damage claims to the physical structure of the home, but it does not cover the homeowner’s or renter’s personal property.
This is where short-term rental insurance comes in. You want to make sure your belongings are safe from theft and vandalism, so you will need to make sure you’ve obtained short-term rental insurance that covers the full value of the items you have in the home. Take pictures of the home before each guest arrives to keep accurate records of how the home looked before each guest arrived so your insurance company can work for you if any issues arise after the guest’s stay.
As you can see, short-term renter’s insurance is designed to be a supplement to the insurance policies already offered by hosting platforms like Airbnb and VRBO. These services do not provide insurance against property theft or vandalism, which is why it is important to have short-term renter’s insurance if you plan on renting out a portion of your home or vacation property.