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What is Vrbo insurance?

Vrbo insurance, also known as host or short-term rental insurance, is a collection of coverages designed for property owners who rent out their homes or rooms via platforms like Vrbo. This also applies to Airbnb. It provides coverage for risks that your standard home insurance policy likely won't cover, such as liability for guest injuries and property damage caused by renters.

While Vrbo, as a platform, offers some liability protection, it often has significant gaps. For instance, it doesn’t cover you in the event of rental income loss due to a covered peril, such as fire. A dedicated short-term rental policy, however, would provide comprehensive coverage for property damage, liability claims and loss of income that both Vrbo liability insurance and standard home insurance policies often exclude.

Who needs Vrbo insurance?

You need short-term rental, host or Vrbo insurance if you are a property owner who:

• Rents out their home, room or condo for short periods.
• Wants protection against guest-related damages that exceed a standard security deposit.
• Needs liability coverage for accidents or injuries that occur on their property during a guest's stay.

What does Vrbo insurance cover my business for?

When you accept bookings through Vrbo’s checkout, you automatically receive up to $1 million in liability coverage at no extra cost through the platform's included host liability insurance. This protection helps if:

• A guest is injured during their stay and makes a claim against you.
• A guest causes damage to someone else’s property and you’re held liable.
• You need legal defense for an eligible claim.

However, Vrbo’s coverage does not include damage to your own property, theft, or loss of income. It’s designed as liability protection only, so you’ll still need a separate vacation rental insurance policy for full coverage. You should consider buying a separate commercial insurance policy that, at the minimum, includes the following coverages:

• Commercial property insurance: This covers damage to your building and its contents (like furniture and appliances) from insured events such as fire or theft. It may also protect it from damage caused by guests, but be sure to confirm this with your provider.

• Excess or umbrella liability coverage: Provides additional protection above the limits of your primary general liability policy, but should function only as secondary coverage to Vrbo’s included $1 million liability protection. This ensures you have higher limits for severe claims without duplicating Vrbo’s primary coverage.

   

What insurance coverage add-ons are recommended for Vrbo hosts?

To further protect your short-term rental property, consider these valuable add-ons to your separate commercial insurance package:

• Business interruption insurance: Also known as ‘rental income,’ this coverage reimburses you for lost rental income if your property becomes uninhabitable due to a covered claim, helping you stay afloat during repairs.
• Cyber liability insurance: If you handle guest data online, this coverage protects you from financial losses resulting from data breaches or cyber-attacks.
• Loss assessment insurance: This will protect you if you are renting out a condo. If guest’s claim against your condo corporation exceeds its insurance policy limit – typically for issues occurring in your condo building’s common areas, like a gym – then this will cover the difference.
• Contingent unit insurance: Should your condo corporation not have insurance or sufficient insurance funds to fully protect your condo, this would cover the amount. Given that the risk is higher when you rent out a condo, adding this coverage could prove invaluable.

How much does Vrbo insurance cost?

The cost of commercial insurance policy for a short-term rental typically starts at $700 per year. However, this price can vary significantly based on several factors, including the value of your property, your location and the amount of coverage you choose. The best way to find out how much it will cost you is to look up a free quote, which you can do here on Rates.ca.

What factors determine the cost of Vrbo insurance?

Several factors influence the cost of your insurance premiums, such as:

• Location: Properties in areas with higher risks (e.g., frequent storms or higher crime rates) may have higher premiums.
• Property type and construction: The type of property you're renting out, whether it's a house or a condo, affects your rate. The materials used to build your property also matter. For example, homes with newer, more durable construction materials are often cheaper to insure than older homes with outdated electrical or plumbing systems, which may pose a higher risk.
• Amenities offered: Exciting extras like a swimming pool, hot tub or fireplace increase the risk of accidents and liability claims. As a result, properties with these types of amenities usually have higher insurance rates to account for the added risk.
• Rental frequency: How often you rent out your space (e.g., full-time vs. occasionally) impacts your premium. More guests mean more risk.
• Coverage limits: The higher the coverage limits you select, the higher your premium will be.
• Claims history: Your personal claims history is a strong indicator of future risk. A history of frequent claims can lead to higher insurance costs – and vice versa.

How does Vrbo insurance work?

Vrbo insurance works by transferring your financial risk to an insurance company. Here are the steps:

• Choose your coverage: Pick the types of coverage that suit your needs, where it’s cyber liability, general liability or all of the above, get a quote and then sign on with an insurer. You also get to set your deductible at this stage.
• Pay your premium: Whether it’s monthly or annual premium, you then pay it to keep your policy active. The cost depends on factors like your property type, location and your claims history.
• File a claim when needed: Should an incident occur – like a guest tripping in your house and getting injured – you can file a claim with your provider to help pay for.
• Receive compensation: After paying your deductible, your policy will then cover the associated costs up to your coverage limits.

How to get the cheapest Vrbo insurance quote

To get the cheapest Vrbo insurance, you’ll need to get a little crafty. He are a few tips:

• Bundle your policies: Many insurers offer discounts if you purchase multiple policies from them, such as bundling your short-term rental and primary home insurance.
• Increase your deductible: Opting for a higher deductible can lower your premium, but be sure you can afford to pay the deductible if needed.
• Maintain a good claims history: Avoiding frequent claims can help lower your premiums over time. For instance, if a claim involves repairs under $1,000, it might be worth paying for them out of pocket.
• Improve property safety: Installing security systems, smoke detectors and fire extinguishers can sometimes qualify you for a discount.