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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 on platforms like Vrbo. These coverages would generally apply if you rent out your property via Airbnb and a similar platform.

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 income loss due to a business interruption. 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 typically exclude.

What Vrbo insurance includes

Your standard Vrbo, or short-term rental, policy will usually include the following coverages:

• Commercial property: This covers damage to your building and its contents, including furniture, appliances and electronics, caused by guests or perils like fire, severe weather, vandalism and theft.
• Commercial general liability (CGL): It protects you against third-party claims for bodily injury or property damage that occur on your rental property. For example, if a guest slips, falls and decides to sue.

Recommended add-ons for Vrbo insurance coverage

To ensure you are fully protected, consider these valuable additions to your Vrbo or short-term rental policy:

• Business interruption: Business interruption, or ‘rental income’ coverage, would reimburse you for lost income if your property becomes uninhabitable due to a covered claim and you have to cancel bookings.
• Loss assessment: For those of you who are condo owners, this will protect you in case a client makes a claim against the condo corporation that exceeds its insurance policy limit. Such claims are made for issues occurring outside your unit, usually within your condo building’s common areas, such as a swimming pool.
• Contingent unit: This covers condo owners if your condominium corporation does not have insurance or lacks the funds or coverage to fully protect your condo. Given that the risk is higher when you rent out a condo, adding this coverage could prove invaluable.
• Cyber liability: If you store client information digitally, particularly outside the Vrbo platform, this would protect you from data breaches and cyber incidents.

Common types of Vrbo insurance claims

While claims don’t happen often, they can be financially devastating. Here are some examples of the kinds of claims being by Vrbo hosts:

• Guest injuries: A guest trips on a rug and breaks their leg, resulting in a liability lawsuit costing thousands of dollars. Commercial general liability would cover those costs.
• Property damage: A guest accidentally starts a kitchen fire, causing significant damage to your appliances. Your commercial property coverage can reimburse you for the loss.
• Loss of income: A burst pipe floods your rental, forcing you to cancel all upcoming reservations while repairs are made. Business interruption, or ‘rental income,’ insurance would reimburse you for your losses should this ever happen.

How much does Vrbo insurance cost?

On average, you can expect to pay a premium starting at $700 per year for a short-term rental or Vrbo policy. This, however, would heavily depend on your individual factors, including the following:

• Type of coverage: The extent of coverage (e.g., liability, property damage, loss of income) and the chosen deductible directly influence the premium.
• Coverage amount: Picking lower limits for liability or property damage protection can decrease your premium – but at the expense of your financial security.
• Location: Properties in high-risk areas (e.g., flood zones, hurricane-prone regions, or wildfire-prone areas) tend to have higher premiums due to increased risks.
• Type and size of your property: The type of property (e.g., single-family home, condo or townhouse) and its condition or age significantly impact insurance costs. Older or poorly maintained properties may incur higher premiums. Furthermore, square footage, number of rooms and materials used to build the property (e.g., brick vs. wood) all affect your replacement cost, influencing your premium.
• On-site amenities and features: Features like swimming pools, hot tubs or fireplaces are considered higher-risk and can increase insurance rates.
• Claims history: Both the property owner’s claims history and the claims history of the area can impact insurance rates.

How to get the cheapest Vrbo insurance rates

Securing affordable short-term rental or Vrbo insurance doesn't have to be complicated. Here are a few strategies to help you find competitive rates:

• Bundle policies: If you have other insurance needs (like auto or a primary home), ask providers about bundling discounts.
• Increase your deductible: Opting for a higher deductible can lower your annual premium. Just be sure you can comfortably afford the deductible amount in the event of a claim.
• Maintain a good record: Avoid filing claims for minor damage. A small scrape caused by a guest that you can either ignore or quickly fix yourself isn’t, usually, worth it. If you maintain a claims-free record, premiums will remain low.
• Enhance safety measures: Installing security cameras, smoke detectors and fire extinguishers can sometimes qualify you for a discount.