What You Should Know About Short Term Renters Insurance

As working remotely becomes more common, renting places to stay for short periods is becoming more frequent, too. Couple this with the rise of home-sharing platforms like Airbnb and VRBO, and it’s easier than ever to rent a place for a short time to see the local sights before moving on to the next. 

You may have even considered renting out your own space (or investing in a rental property) to get in on the action. If you’re looking for coverage when it comes to short-term property insurance, there’s an important distinction to make: Whether you’re on the renter’s or on the owner’s side. We’ll break down everything you need to know about short-term rental insurance for both parties.

Landlord insurance is for a property owner who’s currently renting their place to tenants, while renters insurance is for policyholders who don’t own the property they’re living in. A tenant would get renter’s insurance, which shouldn’t be mistaken for rental property insurance. Rental property insurance is typically another term for landlord insurance.

Before we get into the specifics and variations of short-term rental policies and renters policies, let’s quickly clarify what each one covers. Renters insurance protects you and your stuff by focusing on personal property and liability coverage. It also helps you repair or replace your belongings in the event of a covered loss, or provide support for medical bills if someone is injured in your home. It may also include loss of use coverage.

Renters insurance has little or no coverage for the structure of the property itself since you, as a tenant, don’t own the place you’re living in. Since you don’t own it, you don’t need to pay for its protection. That’s the landlord’s responsibility, which is where landlord insurance comes in.

Landlord insurance provides coverage for the dwelling and other structures on a rental property for the property owner. It also has liability coverage and may contain loss of rental income coverage. If a tenant is forced to move out due to a covered peril, loss of rental income coverage is a provision that allows the insurance company to partially cover the rent payments that the property owner is temporarily missing out on while the renters are gone.

Now, let’s break down how each of these can influence short-term rentals and vacations.

When offering renters insurance, insurers by default typically try to give plans that last for a year. You may be able to find a plan that lasts for six months, but you won’t find one with a shorter term than that. 

So, if you’re only staying at a property for a month or two at a time, there’s no renters insurance for this exact scenario. There’s also no such thing as temporary renters insurance. But, this doesn’t mean you’re completely out of luck.

You’d be very hard-pressed to find a month-to-month renters insurance policy. With year-long policies, renters insurance premiums are typically so relatively affordable as they are that it wouldn’t be worth it for the insurer to offer you coverage for only a few months.

If you only need short-term tenant insurance for a few months, like if you just signed a six-month lease, or you’re moving out of your apartment in eight months, you’re better off getting a standard renters insurance policy and canceling or transferring it to your new address when needed.

The process to cancel and the fees involved vary by company. You’ll have to cancel your policy either online or over the phone. Some carriers may charge you a cancellation fee. If you paid your premium ahead of time or in full, some insurers may refund you your unused premiums when you cancel.

If you’re staying somewhere for a month or two, like an Airbnb or a VRBO, you might be interested in getting some sort of coverage to protect yourself. Short-term renters insurance doesn’t exist for guests, but if you already have renters insurance for your primary residence, you could still be covered under these policies when you travel.

It can vary by provider, but the personal property coverage for renters insurance usually still covers you even when you’re outside of your premises.

For instance, you could be covered whether someone steals your belongings at your home or at your Airbnb. Depending on your policy, your coverage away from your primary residence is likely limited to 10% of your policy’s maximum, but you should still have some sort of personal property protection. Keep in mind the amount of damage still has to be higher than your deductible. 

Liability coverage follows you, too. It’s important to understand the details of your policy before you travel, so you may want to get in touch with your insurer.

Depending on the company, your insurer may want you to add an endorsement to your existing home insurance policy to appropriately cover short-term rentals, or they may ask you to get a separate policy altogether. If you’re renting out a separate property, you’ll need landlord insurance.

Even if you’re just renting out a room in your house, homeowners insurance typically excludes any business-related activities from coverage. They also don’t usually cover guests (or tenants) who stay for longer than 30 days. This could expose you if a tenant were to steal, damage, or get hurt on your property.  

Adding such an endorsement to your plan will typically raise your rate some. Your carrier now has to cover the damage that a new, unknown person could cause in your home. This makes you a bigger risk, so your premium will increase as a result. Contact your carrier to inform them before you rent out a room in your house. 

Not only is this kind of coverage a safe bet for everyone involved, but you might be required to have the appropriate insurance for protecting guests by your city or state, especially if you’re using a home-sharing service like Airbnb. 

When renting out a separate property to various short-term tenants, your homeowners insurance won’t cover you. Home insurance only safeguards a home the policyholder is currently occupying.

Landlord insurance covers properties you own that you don’t live in. When you’re hosting several tenants in the span of one landlord policy year, your rate will likely be higher than if you had one long-term tenant. The more people in and out of your rental property, the greater a risk it is to cover.