What is short-term rental insurance?
Short-term rental insurance is home insurance that’s tailored to meet the needs of a homeowner or landlord who rents out their property on a short-term basis. The length of time that’s considered “short-term” depends on the insurance company; with most, rentals of up to 6 months are usually considered short-term.
When it comes to home insurance, the occupancy of the home is important, and vacation rentals are a unique form of occupancy. “Occupancy” describes who lives in the home and how it’s used; owner-occupied, long-term rental, and vacant are all forms of occupancy.
Every home insurance policy states which occupancy type is insured. If the occupancy changes, the customer must inform their insurance company of the change. If they fail to do so, their policy can be rendered void, causing their insurer to deny any claims or cancel the policy outright.
So, short-term rental insurance exists so homeowners who occasionally rent out their home through Airbnb or VRBO can still have valid home insurance.
If you own an investment property, you may wish to use it as a short-term rental permanently. In this case, you’d buy a landlord insurance policy—but you’ll still need to inform your insurer of your intentions.
Some insurance companies consider short-term rentals higher risk, and simply won’t insure them. Other insurers treat short-term rentals as business operations, which some home insurance policies typically won’t cover.
Before you rent out your home or your investment property, speak with your insurance provider to ensure that they offer short-term rental coverage—and if they do, adjust your policy accordingly.