How Short Term Rental Insurance Protects Property Owners and Travellers

Short term rental, also known as vacation rental, has become a popular option for homeowners looking to earn extra income by renting out their properties to travellers. However, this business venture comes with its fair share of risks. Accidents, theft, and property damage are just a few examples of things that can happen during a stay. That’s why it’s crucial to have the right insurance coverage in place. In this article, we’ll explore the ins and outs of short term rental insurance and how it can protect both property owners and travellers.

What is Short Term Rental Insurance?

Short term rental insurance is a type of insurance policy that covers property owners who rent out their homes, apartments, or condos to travellers. This type of insurance is tailored to the unique risks that come with short term rentals, such as property damage, theft, and liability claims.

In general, short term rental insurance policies cover the following:

Property damage
Covers damage caused by guests to the property and its contents.
Covers legal costs in case of guest injury or property damage.
Covers theft of personal belongings by guests.

What is Not Covered by Short Term Rental Insurance?

It’s important to note that short term rental insurance policies typically do not cover the following:

  • Damage caused by a guest’s intentional acts
  • Normal wear and tear
  • Property owner’s personal liability
  • Loss of income due to cancellations or non-bookings

There may be additional exclusions depending on your insurance provider, so it’s crucial to read your policy carefully and understand what is and isn’t covered.

Why Do You Need Short Term Rental Insurance?

If you’re a property owner who rents out your home or apartment on a short term basis, you may think that your standard homeowners insurance policy is enough to cover any damages or liability claims. However, this is rarely the case. Homeowners insurance policies typically exclude coverage for business activities, such as renting out your property.

Without short term rental insurance, you could be held personally liable for any damages or injuries that occur during a guest’s stay. This could result in expensive legal fees, medical bills, and property repairs, all of which can quickly add up.

Additionally, many short term rental platforms, such as Airbnb and Vrbo, require hosts to have a certain level of insurance coverage in place. If you don’t have the required insurance, you may not be able to list your property on these platforms.

How Much Does Short Term Rental Insurance Cost?

The cost of short term rental insurance varies depending on several factors, such as the location and size of your property, the level of coverage you choose, and your insurance provider. However, you can typically expect to pay between 1% and 5% of your rental income for insurance coverage.

It’s important to shop around and compare quotes from multiple insurance providers to ensure you’re getting the best coverage at the most competitive price.

Frequently Asked Questions

Can I Get Short Term Rental Insurance If I Rent Out a Room in my Home?

Yes, you can still get short term rental insurance if you’re renting out a room in your home. However, your coverage needs may be different than if you were renting out an entire property. Speak with your insurance provider to determine the right level of coverage for your situation.

Do I Need Short Term Rental Insurance If I Only Rent Out My Property Occasionally?

Yes, even if you only rent out your property occasionally, you still need short term rental insurance. Accidents and damages can happen at any time, and even one incident could result in costly legal fees and property repairs.

What Should I Do if a Guest is Injured or Property is Damaged During Their Stay?

If a guest is injured or property is damaged during their stay, it’s essential to document the incident as much as possible. Take photos of any damages, collect witness statements if applicable, and report the incident to your insurance provider immediately. Your insurance provider will guide you through the claims process and help you get the compensation you’re entitled to.

Is Short Term Rental Insurance Tax Deductible?

In most cases, short term rental insurance premiums are tax deductible as a business expense. However, it’s essential to consult with a tax professional to determine your specific tax obligations.

What Should I Look for in a Short Term Rental Insurance Policy?

When shopping for short term rental insurance, there are several factors to consider, including:

  • The level of coverage provided
  • The cost of the policy
  • The insurance provider’s reputation and financial stability
  • Any exclusions or limitations on coverage

It’s essential to read the policy carefully and speak with your insurance provider to ensure you’re getting the coverage you need.


Short term rental insurance is an essential investment for any property owner who rents out their space to travellers. It provides peace of mind and financial protection in case of accidents, damages, or liability claims. By knowing what is and isn’t covered by your policy and shopping around for the best rates, you can ensure that you’re adequately protected and your short term rental business can thrive.