Last spring, Denver implemented short-term rental regulations requiring hosts to maintain $1,000,000 liability insurance. Without sufficient liability insurance coverage and the subsequent short-term rental permit, hosts are not able to operate their business. Currently hosts are only permitted to rent out their primary residence, defined as: the usual place of return for housing. View the remaining rules governing short-term rental licenses

The current guidelines for Denver short-term rentals include the following: 

  • Short-term rental licensees must carry a minimum of $1 million worth of liability insurance for the property being used as a short-term rental. 
  • Short-term rental licensees will be required to notify their regular home or apartment insurers or their Home Owners Association (HOA) of their plans to turn their dwelling into a short-term rental.
  • A short-term rental license can be revoked or sanctioned, and an application for a new license can be denied if a rental property is found to be adversely affecting the public health, safety, or welfare of the immediate neighborhood in which the property is located. 
  • Short-term rental licensees must submit any changes to the name or contact information for a “Local Responsible Party” to the Department of Excise and Licenses within 30 days of the change. 

With more than 2,500 short-term rentals in Denver, the City hopes to strike a balance between preserving the character of their neighborhoods through regulations while allowing hosts to take part in the hospitality industry and welcome short-term rental guests. 

Let’s take a look at short-term rental insurance.

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Short-term rental liability insurance for hosts

Short-term rental hosts are in a unique market. Unlike a long-term lease, hosts often welcome multiple guests in just one week. Many hosts operate their short-term rentals through a local property management group, while they live in a different state or overseas. Whether guests stay two nights or a couple of weeks, the host is handing their keys to individuals they do not know and hoping for the best. Given this, hosts need peace of mind knowing they have property and liability insurance coverage for their short-term rental business. 

While there are several forms of liability coverage available in the open market, there is ultimately one sufficient type of liability coverage for short-term rentals: commercial general liability. Most insurance policies define a business as something that results in more than $2,500 of financial compensation during the 12-month policy period. With the explosive growth of the short-term rental industry, hosts frequently make more than this in a year. This being considered, hosts need commercial insurance as hosts are operating a business, exchanging a night’s stay for money.

A commercial package policy including coverage for building, contents, liability, and income is exactly what hosts need for their short-term rental business. Proper Insurance offers such a policy with special cause of loss (all risk) coverage with $1,000,000/$2,000,000 in commercial general liability. Proper’s policy also includes personal liability if the property functions as the host’s primary residence. This policy meets and exceeds City regulations across the US for short-term rental properties.

Give Proper Insurance a call today to discuss their comprehensive policy for short-term rentals – (888) 631-6680!

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