There are four areas of exposure that need to be covered by insurance; building coverage, contents coverage, income coverage, and liability coverage. When you open your doors to VRBO guests you are opening yourself to major insurance exposure. What if a VRBO guest threw a party and trashed your house? Thus, you had $50,000 worth of property damage. For this you need a business insurance policy, one that would cover VRBO owners. Without adequate VRBO property insurance, you’re vulnerable to the costs of property damage and liability. Whether a guest accidentally or intentionally damages your home, that bill could fall right into your lap if you don’t have coverage. And if a guest decides they want to sue you, you’ll likely need to pay for legal defense – even if their lawsuit is nonsense. You can avoid these concerns by maintaining short-term rental insurance before you list your property on VRBO.
Having Too Little Insurance Could Cost You Big
Relying on homeowner’s insurance is a foolish choice. Most of the time, a homeowner’s policy is not going to help if anything happens during a VRBO rental. Your biggest exposure in being a VRBO rental owner is liability. What if a guest, without you knowing, brought a dog to the rental and that dog bit a neighbor’s child? Your neighbor could sue you for the injury to their child and you would want to file a liability insurance claim. Unless you have VRBO insurance for owners this claim could go unpaid and even flat denied. Make sure you carry commercial general liability insurance coverage for incidents like this, and make sure it does not have an animal exclusion.