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A Complete Guide to Vacation Rental Insurance

What you need to know about vacation rental insurance

Every business comes with a level of risk and requires a safety net. The vacation rental industry is growing rapidly, and short-term rentals are the preferred choice of lodging for travelers across the US, presenting a new set of challenges to hosts and vacation rental property managers.

A steady stream of guests makes your properties more susceptible to damage and guest expectations for a safe stay, sanitized and secure stay are higher than ever before, and rising. Vacation rental insurance is the solution to protect your business and give your guests the peace of mind they need for their vacation.

What is Vacation Rental Insurance

Vacation rental insurance is not something to be left on the top shelf until it’s too late (and you’re digging deep in your own pockets!). If you share your home with anyone outside of family and friends, you’ll want to ensure you have short term rental insurance in place to protect the property and the guest.

If you’re a property manager with a larger portfolio of homes, consider a specialized short-term insurance to protect your properties, guests, homeowners and rental income so your business is adequately covered, insured and fully protected with no coverage gaps.

Vacation rental insurance has advanced leaps and bounds from the traditional insurance model with tech-driven insurance solutions tailored to meet the needs of short-term rentals and the vacation rental industry.

Vacation Rental Insurance for Owners & Property Managers

Every vacation rental business is unique and choosing the best protection for your short-term rental properties depends on a number of factors: the location and size of your properties, your turnover, and your short-term rental market, taking into consideration local city, county and state laws and requirements.

There are varying layers of protection for vacation rental homeowners insurance, from basic OTA coverage to specialized insurance solutions that add a layer of protection and reduce the risk factor for vacation rental property managers, homeowners and your guests.  

Standard Homeowners’ Policy: The number of property managers blindly relying on their standard homeowners policy for short term rental coverage is astounding. A homeowners policy is designed for owner occupied properties and will not cover any theft, damage or liability related to your vacation rental business. An added layer of protection is required to protect your business.

OTA Insurance: It is not a requirement of the Online Travel Agencies (OTAs) such as Airbnb, Vrbo or for hosts to be insured. Hosts and property managers listing their vacation rentals on Airbnb and Vrbo are automatically enrolled in their protection policies. These OTA policies do not offer the full coverage required to protect your homes, guests and business, and are in no way no-fault policies. The claims are processed through the OTA, who have the discretion to refuse your claim for any reason, leaving you to cover the costs.

Property Protection: Vacation rental property insurance covers damage to the property or property contents caused by a guest, third party or unforeseen disasters. Even your favorite repeat guests can cause unintentional damage to your property and contents, resulting in costly repairs and loss of rental income.

Liability Insurance: Injury to guests is one of the biggest risks to property managers and no matter how well you maintain your property, accidents happen! A well-defined liability clause in your short-term rental agreement may minimize the risk, but will not protect you from lawsuits, legal fees and liability if a guest is injured on your property.  

Loss of Rental Income: Protect your business and rental income from potential losses due to property damage, accidents or last-minute cancellations. This is particularly important for property managers with properties in high-risk destinations, where a hurricane traveling through could put your properties out of occupancy for weeks.

Vacation Rental Insurance for Renters & Guests 

Travel confidence is rising, but guests are still planning their trips with extra caution. Google searches for travel insurance and “Cancel for Any Reason” policies have risen over 200% in the last year as travelers seek an extra layer of financial protection and peace of mind on their vacation.  

Trip Cancellation or Interruption Coverage: Trip cancellation policies protect the cost of the trip if a guest needs to cancel or delay due to injuries, weather, hurricanes or even terrorism. These plans generally cover missed connections, lost baggage and sudden travel bans.

Medical Protection: Medical insurance has taken priority for guests traveling during a pandemic, and travelers aren’t leaving home without the reassurance they are covered in the event of a medical emergency. Offering your guests this added layer of medical protection in the event of injury, death or even dismemberment during their stay boosts their confidence to travel and enhances the guest journey.

Theft Protection: No matter how many preventative measures are taken to safeguard your properties, guests should have protection against the theft of personal belongings during their stay in your homes. Travelers are a little less security conscious while on vacation and you do not want to be covering the costs of any stolen goods from your personal profits.

The Cost of a Vacation Rental Insurance Policy

As with a standard homeowners policy, the cost of a vacation rental insurance policy is determined by a number of factors, and the level of protection you choose. When shopping for your vacation rental home insurance bear in mind short term rental insurance solutions range from monthly or annual plans to innovative and affordable digital solutions with a set rate paid only for the days the property is booked.

The Property Location: The cost of a short term rental insurance policy changes from one destination and street address to another. High risk destinations, hurricane-prone areas and short term rental advocacy rules all play a part in determining the risk factor and cost.

The Value of the Property & Contents: A luxury family vacation home loaded with high-end amenities, tech gadgets and modern creature comforts will call for higher premiums than a budget-friendly condo geared for outdoor adventurers who simply need a base.

The Fine Print 

Whether you’re shopping for coverage for your property management business or a reputable insurance product to offer your guests as part of their vacation package, it’s important to fully understand the product being presented to you and read the fine print. Different products offer varying levels of cover so know what’s included and more importantly what is not, the dreaded exclusions that waive coverage for the insured.

For example, you’d think a “Cancel for Any Reason” policy would mean, you can cancel for ANY reason, but many of these policies have pandemic exclusions stating Covid as a foreseeable illness.


InsuraGuest provide innovative insurtech solutions that fill the gap and insert an added layer of protection for the property manager, homeowner and guest. Our policies are underwritten by A+++ carriers, licensed in 50 states and offer real-time integration with the top vacation rental property management software solutions in the industry.  

InsuraGuest for Owners & Property Managers: The InsuraGuest vacation rental insurance policy adds an extra layer of protection, protecting the home, property owner and your business from vacation rental claims. A no-fault and hassle-free policy that asks no questions, integrates with your PMS, activates in real-time on check-in and lowers the claim ratio on your homeowner coverage.

InsuraGuest for Guests: Our InsuraGuest policy covers not only the property but the guest too, enhancing the guest experience every step of the way. A no-fault policy that is affordable and covers the guest for any property damage, theft and medical claims during their stay in your short-term rentals, with a super-simple, no questions asked claims process.

For a free, friendly no-obligation vacation home insurance quote and consultation on how we can help you protect your vacation rental property business and your guests, contact us online today or call our team at (212) 466-6200.

Jenni Jepperson

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