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Investing in real estate comes with risk, and having the right insurance coverage is critical to protecting your rental property investment. Just as each property is unique, your insurance policy should also be custom to your dwelling type, location, duration of the rental agreement, and more.
Understanding the nuances of coverages for short-term, medium-term, and long-term rentals is especially important, as the wrong type of policy can render your claim denied by an insurer. This is because the risk of a long-term tenant is perceived differently from that of a property rented out on a short-term basis, such as an Airbnb or vacation rental. So, how do you know if you have the right coverage in place? In this article, we will take a closer look at each type of insurance policy and its key differences.
Disclaimer: This article discusses insurance coverage in general regarding what is common in the insurance industry. Every carrier’s policy is different, and it is the responsibility of the insured to review their policy for coverage, terms, and conditions.
Short-Term Rental Insurance
Short-term rental insurance is designed to provide coverage for properties that are rented out on a short-term basis, typically for a period of fewer than 30 days. This type of insurance is often used by property owners who rent out their homes on vacation rental platforms like Airbnb and VRBO.
Short-term rental insurance typically includes property damage, theft, and liability coverage. This means that if a guest damages your property or steals something from your home, your insurance policy will cover the cost of repairs or replacement. Additionally, short-term rental insurance often includes liability coverage, which can protect you from lawsuits in the event that a guest is injured on your property.
Some short-term rental insurance policies may also include…