Short-term vacation rentals have become common in Northwoods lake communities. But the moment you accept money from a paying guest, your homeowners insurance situation changes significantly.
Why standard homeowners policies exclude vacation rentals
Standard homeowners policies are written for owner-occupied or occasionally-rented properties. Most have language that excludes or limits coverage when the property is regularly rented to paying guests. Airbnb's AirCover offers some protection — but it has significant gaps and exclusions that many hosts don't discover until they have a problem.
What vacation rental coverage adds
- Guest liability coverage — if a guest is injured on your property and sues, this responds
- Guest property damage — if a guest damages your property, this covers the repair
- Loss of rental income — if a covered loss makes the property uninhabitable, you're compensated for bookings you had to cancel
- Theft by guests — standard homeowners policies often exclude theft by people you invite onto the property
What to sort out before you list
- Call your current agent and ask directly: does my policy cover short-term vacation rentals? Get the answer in writing.
- Consider how many weeks per year you plan to rent. Some policies cover occasional rental without modification. Regular rental almost always requires a specific program.
- Review your dock and watercraft coverage — if guests will use them, your liability exposure increases significantly.
Proper vacation rental coverage for a Northwoods cabin is usually reasonably priced — often a few hundred dollars per year above a standard policy. The cost of a guest injury claim without it is considerably higher.
We write vacation rental coverage for Northwoods properties throughout Vilas and Oneida counties. See our Northwoods coverage approach →