As a homeowner or renter, temporarily leasing your residence as a short-term rental might be a reason to purchase additional insurance. Guests staying at a short-term rental (either through a home-sharing service like Airbnb or directly) also should consider what insurance policies cover or are available to them before choosing to stay somewhere.
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Short-term insurance for homeowners
Home or condo owners who lease their residence for less than 30 consecutive days are typically considered short-term renters and need to understand and weigh the insurance ramifications of temporarily renting their home to guests. Depending on the number of days a residence is leased, an existing insurance policy might be adequate or a homeowner might need to purchase an endorsement or separate policy.
Generally, homeowners and condo insurance liability protection will cover lawsuits filed against a policyholder by short-term guests. It might also cover damages caused by a guest to a lessor's home or personal property. Policyholders should make sure they fully understand what their homeowners insurance will cover by checking their policy and speaking to an agent or company representative.
If a homeowner's short-term renting activity can be defined as commercial, they should strongly consider purchasing an endorsement (if their homeowners insurance company offers one) or a separate policy to cover themselves and their home while lessees stay there.
Short-term insurance for renters
Like homeowners insurance, renters insurance will protect a renter in circumstances related to short-term lessees. A renters insurance policy will cover a policyholder from lawsuits filed against them by a short-term guest. It might also cover damages to the rental unit or a renter's personal property caused by a temporary lessee. Like homeowners, renters need to reference their policy and speak to their company to ensure they understand their coverage.
Assuming a tenant's landlord permits them to host short-term guests, a renter is still subject to rules regarding commercial activity. In addition to the definition of commercial activity generally used by insurance carriers – leasing of 90 days or more per year – individual states and cities might have their own laws regarding short-term guests.
Insurance for short-term guests
There are no insurance policies specifically designed to protect short-term guests paying to stay in someone's home or rental unit. Liability protection that is part of homeowners and renters insurance travels with the policyholder, so as long as a guest has a policy, they will be covered. Homeowners and renters insurance will also cover a guest's personal property they might have with them, up to a limit of a policy.
The only insurance policy a short-term guest might consider purchasing for their stay might be travel insurance. Most travel insurance policies will not cover a guest's personal property or provide them liability protection. However, many travel insurance policies cover trip cancellations and will reimburse a policyholder for accommodation expenses, such as a deposit or bill for a short-term lease.
Insurance for 30-day stays or longer
A guest paying to stay at someone's home for longer than 30 days is not considered a short-term guest. Most homeowners or condo insurance policies will not cover any claim related to a guest who has been paying to stay at the insured residence for that long. Anyone renting out their home for longer than 30 days will likely need to purchase either a landlord endorsement (if their insurance policy offers one) or a separate landlord policy.
As a guest renting a home for longer than 30 days, you should consider purchasing a traditional renters insurance policy. Some insurance carriers will allow policyholders to purchase renters insurance for a shorter period than a year. Most will offer a policy lasting as short as six months, but other companies might insure a policyholder for a shorter term. When purchasing a renters insurance policy for a stay less than six months long, do not assume you can simply cancel a renters insurance policy with a one-year term without penalty. Some companies might charge a fee or refuse to refund all of the premiums for the months that were paid but went unused.
The good news for renters who need insurance for a stay longer than 30 days but shorter than a year is that renters insurance is relatively inexpensive. The average renters insurance premium in the U.S. can be as low as $10 per month. Even if you end up paying for a few months you don't need coverage for, it's better to be insured than to risk your financial well-being for a small sum of money.