Short Term Rental Coverage: A Quick Guide

Trying to rent out your house or a backup property can be a great way to supplement your income, but it is not without danger. With so many different visitors coming and going, short-term rental properties are more likely to sustain unintended damage—not to mention the normal risks of explosions, flooding, and windstorms.

How do you safeguard your short-term investment home? All you need to know about short-term renting and policies is right here.

What is short-term rental cover?

What you should know is that Short term rental insurance is designed specifically for the needs of an owner or landlord who leases out their properties on a short-term basis. The amount of time that is considered “short-term” varies by insurance company; for the most part, leases of up to six months are considered short-term.

The occupancy of the home is important when it comes to property insurance, and vacation rentals are a specific type of occupancy. The word “occupancy” refers to who lives in the house and how it is used; it may be owner-occupied, long-term rental, or empty.

Do hosting sites offer enough coverage?

The $1 million liability protection provided by both Airbnb and VRBO appears to be substantial. However, liability risks can easily surpass or surpass that amount; many property insurance companies recommend that a typical homeowner have at least $1-2 million in liability insurance. With the added risk of having strangers enter and exit your house, you might want to set a higher cap.

More significantly, the coverage offered by Airbnb and VRBO does not substitute for home insurance. When it comes to liabilities and injuries directly related to your visitors, it may be supplemental to home insurance, but home insurance covers a much broader spectrum of losses.

Purchasing the appropriate policy ensures that you have your own insurance in place, rather than relying on the rental platform’s protection to be sensitive and adequate if you incur a loss.

What’s included by home insurance plans?

Homeowners’ insurance covers a broad range of losses and also offers more extensive property security.

For instance, the insurance provided by Airbnb or VRBO does not cover loss from natural catastrophes, which are more probable to provoke catastrophic damages to your house than your guests. Many such losses are covered by home insurance plans, particularly if you have a comprehensive plan.

If you have a robust home insurance policy for your short-term rental, you will be protected from fires, burst pipes, hailstorms, and other disasters (all depending on the specifics of your policy). Some home insurance plans will include extra coverage for damage caused by visitors, particularly if the damage is unintentional.

Furthermore, home insurance includes extra liability coverage. You can set a higher cap than what the hosting companies have, and it extends to a wider variety of scenarios. Since liability protection is automatic with Airbnb and VRBO, you’ll have two methods of protection to ensure you’re safe from the widest range of damages.

Some home insurance plans will also pay for missed rental income if your rental suite is rendered unusable due to insured harm. For instance, if your rental suite is destroyed by fire, your policies will cover the rental income you would have received while it was closed for repairs.


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