As of December 8th, 2021, the City of Encinitas, California passed new vacation rental laws under Ordinance NO. 2021-22.  The city believes that the amended laws will lead to better regulation of vacation rentals, as neighbors have started to complain.  Complaints have ranged from excessive noise complaints to disorderly conduct as well as traffic concerns.  Within the new short-term rental laws, they have included regulations relating to quiet hours, parking permits, and more to address the current concerns.  The new ordinance also includes an insurance requirement of at least $1 million in liability.  

All short-term rental hosts have 90 days from the day this ordinance was approved to update their information with the City of Encinitas.  

Updated Vacation Rental Laws Encinitas, California

Within the new vacation rental laws, the City Council has re-written and updated a majority of the current text for the City of Encinitas.  Within the new laws, you will find ‘Permit Application and Issuance’ section that references application fees, change of ownership, granting of application, and a contents of the application list.  One of the bigger changes to the ordinance states that within the ‘Contents of the Application’ section, all hosts are required to have liability insurance of at least one million dollars that covers their short-term rental operations.  

Encinitas Vacation Rental Liability Insurance Requirement of $1M  

The City of Encinitas understands the risks that follow when hosting an Airbnb, Vrbo, etc. and that’s why they have included the insurance requirement stating that:  

“Evidence of liability insurance for the property in an amount of at least one million dollars to cover the short-term rental operations, which insurance shall be maintained during the entire time of any permit issued by the city.  Renewal must be provided to the City before the expiration of the insurance on file” -Ordinance NO. 2021-22  

The City of Encinitas clearly states above that the liability insurance required must cover your short-term rental operations. This would imply that your standards homeowner’s policy would not suffice as it does not cover the business operations of your Airbnb or Vrbo.

Why Won’t My Homeowner’s Policy Fulfill the City of Encinitas Insurance Requirement?  

A standard homeowner’s policy WILL NOT provide you with the coverage you need for this requirement.  This is due to standard homeowner’s policies only providing personal liability, meant to cover ‘personal acts of negligence’. By definition, liability incidents involving paying guests would fall under business activity and thus require commercial liability protection. 

So, in order to have adequate insurance for your rental operations, you will need a commercial general liability policy. We at Proper Insurance understand the importance of the correct coverage and have custom-written our own commercial general liability policy specifically tailored towards short-term rentals. Our policy starts with $1M of commercial general liability per occurrence with a $2M per occurrence option, therefore will put you in compliance with the new regulation insurance limit, as well as protect you and your business from liability claims.  

Quote Your Short-Term Rental Today  

Looking to fulfill Encinitas California vacation rental liability insurance requirement with adequate coverage?  Proper Insurance leads the Nation in short-term rental insurance, with over 50,000 policies written in all 50 states. Backed by Lloyd’s of London and exclusive endorsements from short-term rental leaders such as HomeAway and Vrbo, Proper Insurance is built on world-class insurance coverage that meets and exceeds both city and lender requirements. 


Quote Your Short-Term Vacation Rental Today