Legislation requiring registration for short-term rentals in Pennsylvania recently moved forward after House representatives approved of the bill. The law, which was passed heavily in favor of, requires property owners who use Airbnb, FlipKey, and other rentals to register with the state and disclose their identity. Officials say the primary purpose of the law is to ensure taxes are being paid.

Opponents of the law claim it is too strict and may lead to other requirements like inspections, fees, and more. Some have even claimed it is too far reaching and violates rights.

Under current laws, rentals in Pennsylvania lasting less than 30 days incur a 6% tax rate.

Some States Now Also Require Insurance

In addition to registration and taxation, some states are now beginning to require short-term rental insurance coverage before property owners are eligible to list their home up on services like Airbnb, FlipKey, HomeAway, and more.

This is because most business owners are already required to maintain liability coverage, which helps protect both the business owner and the customer should something go wrong. However, because it’s so easy to list your property up for rent on services like Airbnb, there are many people using the service without any form of coverage.

According to officials, renting your property is a business activity that is no different than owning a hotel. As such, many property owners are now being required to maintain a minimum level of liability coverage.

What About Property Damage Coverage?

While there are a number of states and counties now requiring commercial liability coverage for Airbnb and other rental sites, very few require property damage coverage. Why would you want property insurance? Well, the answer is simple: to keep your property protected. If a guest damages your home – or worse – destroys it, you want to ensure you can receive reimbursement, so you don’t have to pay out of pocket. Plus, it’s important to understand that your homeowner’s insurance might not cover rental situations. So if your guest wrecks your carpet, your homeowner’s insurance company could deny reimbursement.

Don’t Think About Relying on Built-In Coverages Like the Airbnb Host Protection Insurance

Another mistake property owners make is to rely on free coverage offered by popular rental companies. For example, Airbnb offers both property coverage and liability insurance called the Airbnb Host Guarantee and Airbnb Host Protection Insurance. These coverages come at no additional cost but at best they only offer bare minimum protection. Unfortunately, free insurance coverage rarely works well. These kinds of plans require many different exclusions and restrictions in order to work. For example, some companies require you to maintain receipts and report the damage within a certain time period. What ends up happening is your time period to file a claim ends before you even have an opportunity to report the damage.

Because of this, it’s critical to purchase a separate short-term rental insurance plan like Proper Insurance. With Proper Insurance, you’ll have both property damage coverage and liability coverage. Proper’s policy contains superior coverage for the property itself, including wind, water damage, vandalism, theft, fire, and more. In addition, Proper Insurance provides true business income coverage and commercial general liability in the event of a liability claim involving the renter.

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