Best Short-Term Rental Insurance

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Short-term rental insurance is a specific type of insurance for landlords that covers the property being rented and its guests during a certain period of time. A short-term rental insurance policy can be purchased on its own or as an add-on to your current insurance policy, which is called a rider. A policy should cover loss of income, excess use of utilities, property damage, and liability due to guest injury.

Short-term rental insurance policies don’t replace homeowners insurance or landlord insurance, but they can supplement them. A short-term policy can be used if you own a vacation home that you occasionally rent out or if you rent out a room in your house. Keep reading to find out which short-term rental insurance is right for you and your property.

Best Short-Term Rental Insurance of 2021

Best Overall: Proper Insurance

Proper Insurance

Proper Insurance

Why We Chose It: Proper Insurance is our top pick for best short-term rental insurance because it specializes in this insurance product, is available nationwide, and offers comprehensive coverage.

What We Like
  • No limits on damage caused by a guest

  • Extra coverage, including liquor liability and pet liability

  • Underwritten by Lloyd’s of London

What We Don’t Like
  • No on-demand coverage

  • Cost increases if host lives on the property

Proper Insurance was formed due to the increased popularity of short-term rentals such as Airbnb and Vrbo. It’s located in Virginia and has an A rating with AM Best. Its policies are specifically for short-term rentals and are underwritten by Lloyds of London. It’s also endorsed by the rental site Vrbo. Policies are available nationwide. Proper Insurance has a solid reputation and mostly positive customer reviews and ratings. The company has written over 40,000 policies in all 50 states.

You can get a quote online in five minutes or speak to a customer service agent over the phone during business hours. The claims number is open 24/7 and the application process is streamlined. Policies are customizable based on how much coverage you need, the amount of income you want to be replaced, and the location and value of the property. Premiums typically run from $1,500 to $3,500 per year.

Unlike some companies that offer add-on or supplemental short-term rental insurance policies, Proper Insurance’s policies are designed to replace your current insurance policy. They provide comprehensive coverage for your property. The policies offered are a combination of homeowners insurance, landlord insurance, and a commercial business policy.

Best for Vacation Homes: Nationwide

Nationwide

Nationwide

Why We Chose It: We chose Nationwide because it offers an array of vacation home insurance, it’s customizable based on your specific insurance needs, and it’s available in all 50 states.

What We Like
  • Almost 100 years of insurance industry experience

  • Discounts for bundling policies

  • Ability to customize policies

What We Don’t Like
  • Lack of personalized customer service

  • Large range of policy prices because so many options are available

Nationwide was founded in 1926, is headquartered in Columbus, Ohio, and is comprised of a large group of insurance companies and their affiliates. It’s a recognizable and reputable name in the insurance industry and is one of the largest insurance and financial services companies in the world. In addition to vacation rental insurance, Nationwide offers homeowners, automobile, and life insurance, along with a variety of other services and products.

You can get a quote online or over the phone with a licensed agent in the state you want coverage in. As the name suggests, Nationwide insurance is available in all 50 states. You can choose from condo association insurance, an umbrella policy, personal liability insurance, homeowners insurance, and more. An agent will help you choose the policy that’s right for you.

Policies typically include coverage for loss of income, theft, vandalism, property damage, and liability claims. Average vacation rental policies range from $900 to over $3,000 per year, depending on property value, use, location, discounts, and coverage options.

Best Affordable Option: American Family Insurance

American Family Insurance

American Family Insurance

Why We Chose It: American Family Insurance offers affordable insurance policies that are designed to be less expensive than commercial policies and offer more relevant coverage than landlord policies.

What We Like
  • Lots of available discounts, including loyalty and bundling

  • Temporary policies

  • Coverage only for what you need

What We Don’t Like
  • Not available in all 50 states

  • Not the best option if you rent your property more than 62 days per year

American Family Insurance, founded in 1927 with headquarters are located in Madison, Wisconsin, is a private mutual company focusing on property, casualty, and auto insurance. It also offers investment and retirement planning services. The company’s goals are to inspire, protect, and restore Americans' dreams.

American Family Insurance offers affordable insurance options by providing temporary rental coverage and a landlord’s endorsement of your existing policy. You can add to an existing policy instead of having to incur the cost of an entirely new policy so you’re basically only paying for what you need. Keep in mind that these add ons are ideal if you rent your property 62 days a year or less. Coverage is available in 17 states, including Arizona, Kansas, and Ohio.

The cost averages $30 for a policy covering 62 days, and you can choose to add on identity theft and appliance breakdown coverage. There is an online tool to help you decide which coverage is right for you. Quotes are available online or by calling a licensed insurance agent.

Best for Sharing Your Home: Erie Insurance

Erie Insurance

Erie Insurance

Why We Chose It: Erie Insurance offers home-sharing coverage as an affordable add on to your existing homeowners or landlord policy. The company has high J.D. Power ratings and decades of experience.

What We Like
  • You can add the policy to your existing insurance

  • Personal agent assigned to you and your policy

  • More affordable than purchasing a separate policy

What We Don’t Like
  • Coverage isn’t available for second or vacation homes

  • Only available in 12 states

Erie Insurance was founded in Erie, Pennsylvania, in 1925 and now serves 12 states, including Pennsylvania, Ohio, and Maryland. Its founding purpose is to provide the best possible coverage and customer service at the lowest rates. The company started with two people and has grown to a Fortune 500 company with over 5,000 employees and more than 5 million policies written.

In addition to short-term rental insurance, Erie offers auto, renters, and flood insurance, plus a litany of other insurance products. A home-sharing policy covers you from property damage claims, theft, and liability claims, which is an optional add-on to your homeowner's policy. You may be able to add on the home-sharing coverage for as little as $60 per year, but it’s best to check with your Erie agent.

You can get a quote by calling a local agent, who will be assigned to you for the duration of your policy, a personal service that some of the larger companies don’t always offer. You can file a claim with your agent or through the claims number which is open 24/7.

Final Verdict

Short-term rental insurance comes in many different forms. You can choose to add on coverage for a short period of time, buy a new policy, or supplement your current policy. It’s important to consider how you use the property and what type of coverage is needed. The companies we reviewed offer a broad array of coverage, including comprehensive short-term rental insurance, add-ons for 62 days or less, and home-sharing and vacation rental policies. We recommend checking out Proper Insurance because of its comprehensive coverage offerings in all 50 states.

Frequently Asked Questions

What Is Short-Term Rental Insurance?

Short-term rental insurance is a type of specialty insurance to cover your property during short rental periods. It doesn’t replace your homeowners or landlord insurance policies, but it can be added on to them or purchased separately to cover the times when your property is rented out.

These policies cover things like property damage, vandalism, theft, and fire. They should also cover excessive utility usage, such as when a guest forgets to turn off a faucet. Other coverage includes liability and loss of income. 

Who Needs Short-Term Rental Insurance?

You have probably heard stories of renting a home out to people who are supposedly responsible guests, but owners return from a weekend away to tens of thousands of dollars worth of damage. Short-term rental insurance is ideal for that kind of situation.

Basically, if you are renting out your personal residence, your vacation home, or any other property for a short period of time, you need short-term rental insurance. You need it whether you rent out a room in your house or your entire house. It’s much more cost-effective to pay for an insurance policy than to take the risk of paying out of pocket for damage, theft, and/or expenses related to injuries occurring on your property.

How Much Does Short-Term Rental Insurance Cost?

The cost of rental insurance varies based on a number of factors, including:

  • Location of the property
  • Type of property
  • Frequency of rentals
  • Previous insurance claims
  • Property value
  • Type of insurance coverage

Typically, short-term rental insurance is higher in price than homeowners or landlord insurance because it is considered to be more high risk by the insurance company. Because you have different guests staying in the property and the property may sometimes be vacant, there’s a greater chance of potential property damage than with a personal residence or property you rent out yearly. Policies can start at $30 for short-term coverage to over $3,500 for a new policy.

How We Chose the Best Short-Term Rental Insurance

We researched more than a dozen short-term rental insurance companies before deciding on the best options. The companies that made our list are reputable, have been in business for a while, and provide quality insurance products to property owners. We also considered the type of coverage offered, customer reviews, additional offerings, and policy customization options.