When considering insurance for a Vrbo rental, four areas of exposure need to be covered by insurance, including: building coverage, contents coverage, income coverage, and liability coverage. Building coverage addresses the property itself, the structure, etc. Contents coverage is for the belongings inside the property, including furniture and small appliances. (It goes without saying that it’s not wise to keep personal valuables inside your rental property!) Income coverage refers to a safety net should you not be able to earn income from renting your property due to a claim. Finally, liability coverage protects you from the risk of incidents occurring at your property for which you could be held liable (e.g., injuries, damage to the property).

When you open your doors to Vrbo guests, you are opening yourself to major insurance exposure. Opening your doors to strangers (or even people you know!) invites a fresh set of risks each time a new group of guests stays at your rental. You, the homeowner, aren’t there to make sure nothing goes wrong. So, for instance, what if a guest threw a party and trashed your house causing $50,000 worth of property damage? For situations like this, you need a business insurance policy that would cover Vrbo owners’ properties. Without comprehensive Vrbo property insurance, you’re vulnerable to the costs of property damage and liability suit. Whether a guest accidentally or intentionally damages your home, that entire 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 securing commercial short-term rental insurance before you list your property on Vrbo.

Vrbo Owners Need Commercial Insurance to Cover Their Rental

Relying on homeowner’s insurance to cover your Vrbo rental is a misinformed choice. Most of the time, a homeowner’s policy is not going to help if anything happens during a guest’s stay at your Vrbo rental. This is because homeowner’s insurance policies aren’t going to cover your short-term rental property due to a business exclusion clause. Your Vrbo rental is considered a business because you’re making income from renting it, and therefore, is not covered by a standard homeowner’s policy. Therefore, you need commercial insurance.

Your biggest risk as a Vrbo rental owner is liability. What if a guest, brought a dog to the rental and that dog bit a neighbor’s child? Even if your house rules state that animals and pets are not allowed, your neighbor could sue you for the medical expenses related to the injury, and you would need to file a liability insurance claim. Unless you have insurance for Vrbo owners, this claim could go unpaid — and even flat-out denied. Make sure you carry commercial general liability insurance coverage for incidents like this, and make sure it does not have an animal exclusion.