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Temporary Rental Insurance

Short-term & Temporary Rental Insurance

If you rent your property on a short-term basis, 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 temporary 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 lease your home for up to 62 days a year. It’s designed to protect you against loss or damage to your building and its contents in the areas of the property you rent out. Adding landlord’s coverage protects property managers and real estate owners against lost income if their property sustains a covered loss 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 out 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 and their personal information and even run credit reports up front. With credit scores in hand, landlords can make a more informed decision on the financial health of the prospective renter.

If the property remains in good condition, the property owner will return the security deposit to the renter. But if the tenant causes damage 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 in the event of a covered loss.

Other issues with your rental property, like those resulting from normal wear and tear, will not be covered. You’ll need to keep your property well maintained to keep losses to a minimum.

For 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.

When Would You Need Short-term Rental Insurance as a Homeowner?

Short-term rental insurance for homeowners is best used not when you’re renting your units out on a week-to-week basis, but for other brief periods of time. Short-term rental insurance policies for renters often restrict the total amount of days per policy period that your home can be rented out. If you rent your property beyond that threshold, you may not be able to collect on a claim if the unexpected should happen. A better option would be to pick up bed-and-breakfast or hotel insurance that’s designed to protect against issues which typically arise from short-term rental properties.

Are My Belongings Covered If I Stay in a Short-term Rental via Airbnb or VRBO?

Exactly how does insurance work with Airbnb? If you’re wondering “are my belongings insured when I stay in an Airbnb or a hotel?” you’re not alone. 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 when traveling. Liability coverage often operates in a similar manner, protecting wherever you may travel.

How Much Does a Short-Term Rental Policy Cost?

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 and landlord’s coverage endorsement provide a much more reasonably priced alternative to a commercial policy.

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? Connect with an American Family Insurance agent to answer all your questions about temporary rental insurance. We’re an insurance company dedicated to getting you a customized quote that’s developed to meet your specific needs.