I am new to being an AirBNB host, and I have a small cottage on my 4 acre property that is ready to go in about 3 weeks, however I am debating the cost and necessity of purchasing Short-Term Vacation Rental insurance. I already have an umbrella policy for the property and my home, however this police specifically covers the cottage.
Does anybody have advice either way on this subject?
Yes, you should have dedicated short-term rental insurance.
Check your existing policy very carefully. Most have exclusions for short term rentals and many types of commercial use. It’s even possible that by doing short-term rentals on your property, the entire policy becomes void.
This is so true, don’t risk what is possibly your biggest asset. As Bryan says, it’s more than likely that if anything were to happen your policy would be void, even if the incident was not linked to the Airbnb usage. The insurer would simply claim they wouldn’t have offered you coverage if they had been in possession of the full facts - at least that’s how it works here in the UK
Yes, get the insurance. You can write it off as an expense. I too have a umbrella insurance but it only covers me for a million. If you had four guests injured and they were to sue you, I bet each person would sue you for a million dollars so your umbrella insurance would not fully cover you.
Also review the several threads on this topic!
You absolutely need specialist home insurance for STRs to cover the many areas excluded under the Airbnb guarantee.
Any standard home insurance you have is likely to exclude commercial lettings - have you checked your policy ?
It’s a business expense which should be tax deductible. @FTP
You need to speak with a knowledgeable insurance agent who knows both your state requirements and the short term rental market. Many do not. My state requires insurance. Having experienced a lengthy, stressful lawsuit related to a non-Airbnb issue, I can tell you that you don’t want to risk it. You have potential loss of property, liability and interruption of your STR business once it take off. Find out so that you can figure this expense into your pricing.
The insurance is quite expensive you might be better off to rent it for more than 30 days then they can be covered on your regular insurance with a tenant policy.