Have a nice lake cabin or apartment in a busy city and want to advertise the place as a short-term rental? You may need to increase your insurance coverage.
We've rounded up everything you need to know about protecting your home or rental property when renting to short-term guests. Learn more about who needs short-term renters insurance and how to find the right policy. We've also compiled a list of some of the best insurance companies for short-term rental protection.
- Allstate - Best for Home Sharing
- Proper - Best for Vacation Homes
- Nationwide - Best for Coverage Options
- Progressive - Best for Occasional Renters
- State Farm - Best for Landlord Insurance
What is short-term renters insurance?
Homeowner and renter's insurance covers damages during your stay in your apartment, house or apartment. Your policy may not cover other people's activity when you allow other people to rent your space. Let's say someone gets hurt: you could be liable, and your homeowners policy might not cover that.
Short-term renters insurance is insurance coverage for rental properties or temporary rentals. Policies protect you from damages that occur when someone else temporarily rents space in your home.
For example, let's say you rented a room for the weekend and a guest accidentally sets it on fire. It may not be covered by regular home insurance. In contrast to what happens with friends on the weekend, renting a room is often seen as a business. Business transactions often mean you need more coverage.
You may be able to add an endorsement or specific additional coverage to your existing insurance. Otherwise, you may need to purchase a separate, separate policy to rent your space. Some providers offer self-contained vacation home rental policies. However, most stand-alone policies are actually business property documents or homeowner's insurance policies.
Who Needs Short Term Renters Insurance?
How do you decide if you need short-term renters insurance? Generally speaking, anyone who stays in a rental property for 30 days or less is considered short-term rented.
Existing homeowners insurance may be sufficient coverage if you rent your home occasionally. Does your city host a big festival every year? If so, you may want to earn extra money by renting an additional room. Since a room is only rented for one or two nights a year, it may be fully covered under your current policy.
However, each insurance company has different rules about occasional renters. You should speak with your home insurance provider to find out more about your specific policy. Know that you will likely need additional coverage if you plan to rent your home more than a few times a year.
You may want to consider adding short-term renters insurance to your home if:
- Owning a vacation home and renting your property several weeks a year
- Rent an extra room several times a month
- Have a separate building on your property that you use as your vacation rental
What to look for in politics
Like any homeowners insurance policy, there are certain things to look for in a short-term rental policy. The cost of coverage is likely to play a large role in the policy you choose. The type of coverage the policy provides should also be an important factor.
Be sure to consider these factors:
- The cost of the policy premium or the additional cost of existing home insurance
- The amount of coverage for property damage or liability
- An amount deducted if you need to file a claim
Premium: The cost of your policy, which is often charged monthly, twice a year, or annually.
Liability Coverage: Covers injuries to your tenants or their guests during their stay at your property. For example, if a tenant walks through a loose floor slab, liability insurance should cover legal or medical costs associated with the injury.
Deductible: The amount of your claim that you must pay before your insurance company will pay.
You should also consider your coverage options:
- Add an Acknowledgment to your existing homeowners policy for short-term renters.
- Get a vacation rental, shared home, or other insurance policy specifically designed for short-term rentals.
- Get a homeowners insurance policy that covers short-term renters.
- Get a commercial property insurance policy.
There are pros and cons to each type of coverage. Be sure to weigh each option before choosing the type of coverage.
Add a verification to an existing homeowner's insurance policy
This is the easiest way to get short-term renter coverage. You just need to contact your homeowners insurance agent and ask about adding additional coverage for short-term renters.
Positives:
- You will not need a new policy.
- This is usually the least expensive option for short-term renters.
- You will deal with your current insurance company and agent.
Negatives:
- Short-term renters insurance is not available on all homeowners policies
- The coverage provided by the short-term rental endorsement may not be sufficient if you rent your home frequently.
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