A Guide to Vacation Rental Insurance: Protecting Your Property

With many people now resuming traveling the world post-pandemic, whether it be for business or leisure, the demand for quality accommodation has soared. People are also now looking for more than accommodation and meals, but also a home-like experience during their trips.

Due to this demand, there has been a rise in people offering to rent out their vacant properties or rooms as holiday rentals. These could be urban apartments, beachfront cottages, mountain cottages, or any other kinds of properties. Vacation rentals have now become seen as a lucrative venture.

However, as is the case with any other investments or businesses, the vacation rental business has its fair share of risks. To safeguard both the hosts and the guests, vacation rental insurance is nothing less than a necessity. As a host, vacation rental insurance protects your property and eases your concerns about any liabilities.

A look at vacation rental insurance

Vacation rental insurance is a kind of insurance coverage that protects you from potential financial losses resulting from renting out your property. Although traditional homeowners’ insurance policies may offer some protection, they may not offer sufficient cover for the specific risks associated with short-term rentals.

Some of the risks that vacation rental insurance covers include liability claims, property damage, and even loss of rental income as a result of covered events, such as damage or theft to the property or contents. Because vacation rental insurance policies differ, you should carefully check the coverage details as you choose the cover to take out. You need to consider the types of risks covered, limits for the coverage, and any exclusions. You should find a policy that aligns with your specific individual needs, property type, location, and so on.

Understanding the Airbnb cancellation policy

Besides insurance considerations, it is crucial as a host who has listed your property on hosting platforms to acquaint yourself with the cancelation policies of the specific platform you use. For example, you need to understand the Airbnb cancellation policy if you have listed your vacation rentals on the Airbnb platform.

Airbnb’s cancellation policy is a system that guides booking cancelations for both the guests and the hosts. The platform offers various types of cancelation policies that differ as per the terms and payouts.

Types of Airbnb cancelation policies

As a host on Airbnb, you have three main cancelation policies to choose from:

·   Flexible – this is the most lenient for the guests as they receive a full refund if they cancel their booking 24 hours before check-in time. This policy exposes the hosts to financial losses because they are not protected against cancelation.

·   Moderate – the policy offers guests a full refund if they cancel not less than 5 days before the check-in date. This option results in hosts having less exposure to cancelation while still giving the guest a certain level of flexibility. It is the most popular option.

·   Strict – guests are eligible for a full refund if they cancel within 48 hours of making the reservation and at least 14 days before the check-in time (in the listing’s local time zone). If they cancel after 48 hours, they get a 50% refund no matter how far the check-in date is. Also, cancellation within 7-14 days before the booking commences guarantees the guest a 50% refund, except for the service fee.

The essence of having the various Airbnb cancelation policies is to offer hosts some flexibility as they manage their property bookings, and may influence the decisions that potential guests may make. When choosing a cancelation policy as a host, you need to factor in your circumstances, local market dynamics, and risk tolerance.


When running a vacation rental business, you need insurance coverage to safeguard your property from unforeseen circumstances. On the other hand, you need a fair cancelation policy to ensure positive guest experiences and culminate in a good reputation as a host. With a good blend of insurance coverage and cancelation policy, you stand a better chance of having a successful vacation rental business.

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