Home insurance companies view the short-term rental of your home through services like Airbnb and Vrbo as a business venture. Therefore, a standard home insurance policy may not protect you if your home or belongings are damaged by a paying guest in your home. Fortunately, you can purchase an add-on policy to cover you in these instances.
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What is short-term rental insurance?
Short-term rental insurance is an endorsement to a standard homeowners insurance policy. It offers personal property and liability coverage if you lease your home on a temporary, short-term basis. Standard home insurance does not cover business activities, which renting your home — or even just a room — falls squarely under.
While the time limit may vary between insurance providers, many companies consider a home rented out for two months or less to be short term. Short-term rental insurance is also only required if guests pay to rent your home. If you let friends or family stay for free, it's not necessary.
Short-term rental insurance coverage
Short-term rental insurance typically offers the same types of coverages that a standard home insurance policy includes. Short-term rental insurance policies may cover the following:
- Damages to your home or personal property
- Liability in the event of a guest getting injured on your property during their stay
- Loss of income in the event your home is damaged by a covered peril and you are unable to rent it out while repairs are being made
How to get a short-term rental insurance policy
The best way to get a short-term rental insurance policy is to talk with your homeowners insurance company first. Insurance companies can offer short-term renters insurance as an endorsement or rider, which is an optional add-on to your home insurance policy.
If someone is renting out your home for an extended amount of time, then you may need to purchase landlord insurance. A landlord insurance policy protects the structure of your home as well as your belongings. Landlord insurance will not cover a tenant's belongings. Tenets can protect their personal property by purchasing a renters insurance policy.
Host services insurance policies
As part of their service packages, hosting services such as Airbnb and Vrbo offer host protection that covers damage to your belongings and liability protection. Airbnb offers host damage protection that will protect you if your house or belongings are damaged by a guest during their stay. Airbnb also offers host liability coverage that will protect you if a guest gets injured or their personal belongings are damaged or stolen while they're staying in your home.
What companies offer short-term renters insurance?
If your home insurance provider does not sell short-term renters insurance, you should compare quotes from multiple insurance providers. Companies that sell short-term rental insurance include:
- Allstate - Offers a home sharing insurance policy that can cover stolen property and accidental damage to your personal property while someone is staying in your home
- Farmers - Offers landlord insurance than can be personalized
- Foremost - Offers endorsements and different landlord packages
- Nationwide - Offers landlord insurance and endorsements
- Progressive - Offers landlord insurance
- Proper - Specializes in short-term rental insurance for Airbnb and Vrbo homeowners
Short-term insurance for renters
Renters who are staying at your property should purchase their own renters insurance policy if they need coverage for their personal property. If you already have a renters insurance or home insurance policy, your policy may cover your personal property when you're traveling and away from home.
Do I need short-term rental insurance?
Neither state law nor mortgage lenders require you to carry short-term rental insurance. However, it may be an excellent investment since homeowners insurance doesn't cover many of the problems that can occur with guests in your home.
Furthermore, many homeowners insurance policies have a clause regarding termination of coverage if your home becomes a rental property. Having short-term rental insurance can protect you from that.
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