Temporary Rental Insurance
If you rent your property, like your home or cabin, through home-sharing programs like Airbnb or VRBO®, you may think you’re covered for damage, theft or liability through your homeowners or a landlord insurance policy. However, that may not be the case.
Your homeowners insurance is meant for owner-occupied properties, and commercial policies typically cover buildings that are occupied by long-term tenants. These policies may limit coverage when the dwelling is rented on a short-term or occasional basis, which means you’ll need short-term home insurance to ensure you don’t face gaps in coverage.
What Does Short-Term Rental Insurance Cover?
The temporary rental to others coverage is protection you can add to your homeowners insurance policy if you rent your home for up to 62 days a year. It’s designed to protect you against theft of or damage to your building and its contents in the areas of the dwelling you rent out. Adding landlord’s coverage protects you against lost income if your property sustains damage that makes it unrentable.
Here’s a closer look at some of the ways this coverage protects your home:
Rental property damage. If you rent your home, there’s always a risk that the tenants might damage it or its contents. Sometimes property owners ask renters for a security deposit up front. If the property remains in good condition, the property owner will return the security deposit to the renter. But if any damages are made during the stay, that money will be used to cover the damages. In some situations, such a deposit may not be enough to cover major damage. In these cases, temporary rental to others coverage will step in and help cover remaining costs.
Theft protection. If a renter steals from your property, you may not realize it until later — long after you return their security deposit. Similar to the theft protection you have on your home when it isn’t rented out, temporary rental to others coverage protects you if anyone steals while renting from you. And this doesn’t just apply to theft by those staying in your home. It also includes theft if a burglar breaks in and steals from your property when a renter is staying there.
Should You Get Short-Term Home Rental Insurance?
For starters, it’s important to understand that if you rent out a property to a tenant year-round, you’ll need landlord insurance. If you rent out your home with home-share companies like Airbnb or VRBO for 62 days or less per year, you’ll want short-term home rental insurance.
Short-Term Rental Cost
The cost of a commercial policy for a rental dwelling can be quite expensive. 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 and landlord’s coverage endorsement provide a much more reasonably priced alternative to a commercial policy.
Find the Right Short-Term Rental Insurance for Your Home
Ready to find the right coverage for your short-term rental? Connect with an American Family agent to answer all your questions about temporary rental insurance and to get a customized quote specific to your needs.