Everything you need to know about insurance basics, like coverage types, limits, cost and more.
Temporary & Short-term Rental Insurance
If you rent your home on a short-term basis — like your home or cabin — you may think you’re covered for damage, theft or liability through your homeowners policy.
But that may not always be true. Your homeowners insurance is meant for owner-occupied properties. These policies may limit coverage when the dwelling is rented on a short-term basis, which means you’ll need temporary home insurance to ensure you don’t face gaps in coverage.
Short-term rental coverage is great for homeowners that want to rent out their home while they’re away. Coverage is limited to 62 days (about 2 months) per calendar year, and it is ideal for snowbirds who want to rent their place when they’re not around during those chilly winter months.
If you’ve got friends, extended family or house sitters scheduled to look after your home while you're away, this temporary and short-term rental coverage can help to better protect your finances. Even if you're not renting out your place, it’s an extra layer of protection that can really make a difference if something unexpected happens.
It’s also great coverage if you’re planning on house swapping with another homeowner across the US, or across the world. Take look at how temporary and short-term rental coverage helps to protect your home — when you rent it out or have a house sitter for limited periods of time during a given calendar year.
On screen: Temporary Rental Coverage
Narrator: If you rent your home or cabin on a short-term basis, consider adding temporary rental insurance to your homeowners insurance policy.
On screen: Dwelling Coverage
Narrator: Your homeowners insurance policy won’t always provide the same level of coverages when your home is being rented to others.
On screen: Temporary Rental Coverage
Narrator: And to avoid any gaps in coverage, temporary rental insurance can be added to your policy at an affordable rate.
On screen: Damage — Theft — Liability
Narrator: It’ll cover things like damage to your property, theft and liability if someone were injured on your property.
On screen: 52 – 62
Narrator: How do you know if you need this coverage? You’ll want this added protection if you rent your home or a portion of it for 62 days a year or less. Especially if you rent through a home-sharing site.
On screen: Talk to Your American Family Insurance agent
Narrator: Want to learn more about temporary rental insurance? Connect with your American Family Insurance agent today.
What Does Temporary Renters Insurance Cover?
Our temporary rental-to-others coverage is protection you can add to your homeowners insurance policy if you lease your home for no more than 62 days a year. It’s designed to protect you against loss from damages — to your building and its contents while it's occupied by someone while you’re away.
Adding landlord coverage helps to protect property managers and real estate owners against lost income if their property sustains a covered loss that makes it unrentable. But temporary rental coverage to others works a little differently.
Here’s a closer look at some of the ways short-term rental insurance protects your home while it’s being rented or lived in by someone else:
Rental home damage
Suppose you’re a snowbird and decide to rent out your home while you’re away enjoying warmer weather in the southern US. If you rent out your home, there’s always a risk that the tenants might damage it or your contents.
Sometimes homeowners ask renters to sign a rental agreement, supply a security deposit and even run credit checks on renters up front. With credit scores in hand, you can make a more informed decision on the financial health of the prospective renter.
If the house stays in good condition, the homeowner returns the security deposit to the renter. But if the tenant causes accidental damage during the stay, that security deposit will be used to cover the damages.
And in some situations, the security deposit alone may not be enough to cover major damage. Suppose a fire breaks out in the kitchen or your temporary renter damages the garage door when backing out. Or perhaps your backyard furniture is stolen while you’re away.
Without the added protection of temporary rental coverage, you may be left to pay out of pocket to restore your home. In these cases, this additional insurance can step in and help cover those costs in the event of a covered loss — after meeting your deductible.
Other issues with your home, like those resulting from normal wear and tear, will not be covered. You’ll need to keep your home well maintained to keep losses to a minimum.
Theft and burglary
If a renter steals from your home, you may not realize it until later — long after you’ve returned their security deposit. Similar to the theft protection you have on your home when it isn’t rented out, temporary rental-to-others coverage also protects you if anyone steals certain items from your home when it’s under lease.
And this doesn’t just apply to theft by those staying in your home. It also includes theft coverage if a burglar breaks in and steals from your home when a renter is staying there.
How Much Is Short-term Rental Insurance?
The cost of a commercial policy for a rental dwelling can be quite expensive, ranging anywhere from $2,000 - $3,000 annually — or about 2 - 3 times as much as a typical homeowners policy. As long as you’re renting out your dwelling (or a portion of it) for 62 days a year or less, the temporary rental to others coverage provides a much more reasonably priced alternative to a commercial policy if you need a quick solution when temporarily renting your home.
Should You Get Short-term Rental Insurance?
For starters, it’s important to understand that if you rent out your place to a tenant year-round, you’ll need landlord insurance. If you rent out your home for 62 days or less per year, you’ll want short-term home rental insurance.
When Would You Need Short-term Rental Insurance as a Homeowner?
Short-term rental insurance for homeowners isn’t for use when you’re renting your house out on a week-to-week long-term basis, but for other brief periods of time. Short-term rental insurance policies for renters often limit the total number of days per policy period that your home can be rented out.
If you rent your home beyond that threshold, you may not be able to collect on a claim if the unexpected should happen. A better choice would be to pick up bed-and-breakfast or hotel insurance that’s designed to protect against issues which typically arise from rental properties that are rented on a longer-term basis.
Are My Belongings Covered If I Stay in a Short-term Rental?
Most homeowners and renters insurance policies will extend a certain percentage of coverage to losses that occur while away. As such, your personal belongings are likely insured through your homeowners policy when traveling. Liability coverage often works in a similar manner, protecting you wherever you may travel, even in a short-term rental.
What Are the Risks Associated With Temporary Rentals?
You should know that if you store personally identifiable information in your rental, you run the risk of your identity being compromised. Credit card data, social security numbers and birthdates are typically all that a thief needs to apply for a loan or even illegally collect retirement or tax benefits. But with our identity theft protection coverage, you’ll have resources available to you if something should happen.
How to Find the Right Short-term Rental Insurance for Your Home
Ready to find the right coverage for your short-term rental? Whether you’re planning on spending the winters in warmer climates, or just planning to rent your home out soon, or having someone house-sit, be sure to connect with an American Family Insurance agent. They’ll answer all your questions about temporary rental insurance. At American Family, we’re an insurance company dedicated to getting you a customized quote, developed to meet your specific needs.
This coverage is not available in MN at this time.
Some coverages may not be available in your state or on your specific policy form. Please speak with your agent to learn more about your coverage options.