Umbrella Insurance for Short Term Vacation Rentals & Airbnb

This past month, I was reviewing our homeowners insurance since one of our policies was coming up for renewal. All of our homeowners insurance policies are specifically geared toward short term rentals. We use Proper Insurance, Foremost, and used to used CBIZ as well. Typically home insurance policies do not cover short term rentals for less than 30 days. So if they guests damage the property or get hurt, your homeowners insurance might not cover the damage or liability.

All our short term rental homeowners policies cover liability if someone gets hurt or sues you for something that happens, typically up to $1MM (that amount varies based on the policy and how much you elect).

This is not insurance advice, but above and beyond that liability amount, an Umbrella Insurance policy can kick in and provide coverage after the liability coverage on your homeowners insurance is tapped. You should consult with an insurance professional to verify that. Typically your umbrella insurance provider will require you have your car or homeowners policy with them.

So as part of our review, we called our current Umbrella Insurance policy provider, only to find out that while their coverage applied to rental properties, their coverage did not apply to short term rental properties, since that is a commercial activity. Doh!

Luckily, we worked with an insurance broker that helped us find an umbrella insurance that did apply to short term rentals. So we switched Umbrella Insurance providers to ones that would specifically cover short term rentals. Worth checking with all your insurance providers to make sure they actually cover short term rentals or if you could be out of luck if disaster strikes!