Renters' Insurance Coverage When You Use Airbnb or VRBO
Renters' insurance can cover you from losses while you travel.
If you’re a renter, renters' insurance is a good thing to have (plus your landlord may actually require it). Although your landlord undoubtedly has insurance, your landlord's insurance policy does not provide coverage for your personal property inside your rental unit. For example, you won’t be covered by your landlord’s insurance if your computer or bicycle is stolen or destroyed in a fire. This is where renters' insurance comes in. It can also provide liability coverage in the event someone is injured in your rental unit and decides to sue you. For more details, refer to the Nolo article Renters' Insurance.
What Renters' Insurance Covers While You Travel
Renters' insurance has another little known benefit: Depending on your policy, it can provide coverage not only when you are home, but when you travel as well. So, for example, if your purse, cell phone, or other personal property is stolen while you’re staying someplace you rent short term (through Airbnb, VRBO, or another online hosting website), your renters' policy will typically cover the loss up to your policy limits. Not only that, if your luggage is lost or stolen while you’re in transit, your renters' insurance may cover the cost of the lost items to the extent such loss is not reimbursed by the airline—again, up to your policy limits.
Your renters' policy will also cover you if you accidentally damage or destroy your temporary landlord’s property—for example, if you leave the bathtub running, causing it to overflow, resulting in water damage to a room you rented on Airbnb or VRBO. Your renters’ policy may also provide you with liability coverage in the event of accident or injury during your short-term stay—for example, another guest slips and falls on a toy your child left out and sues you for damages.
Finally, if your vacation rental becomes uninhabitable due to fire, or a natural disaster like a storm, renters' insurance will typically pay for the cost of staying at a hotel (within some limits).
Renters' Insurance Is Not Travel Insurance
Keep in mind that renters' insurance is not the same as travel insurance. For example, renters' insurance won’t cover you if you need to cancel your trip due to illness and lose your deposit on an Airbnb home, and it won't pay for any emergency medical expenses you have while traveling. If you want this type of coverage, you need to purchase a separate travel insurance policy. There are travel insurance policies available that are geared specifically toward vacation home rentals, rather than stays in hotels.
Renters' Coverage Is Only as Good as Policy Limits and Exclusions
It’s also important to understand that your renters' insurance coverage is always subject to the policy limits and exclusions. These vary with the price of the policy—the broader the coverage the more you must pay. Thus, for example, your policy may have a limit of $1,000 for theft of jewelry. Also, the standard renters' policy has a $100,000 limit on personal liability coverage. If you want more coverage than provided by the standard policy, you’ll have to pay for it, however, the cost of obtaining higher policy limits is usually quite modest.
Know the Difference Between Replacement Cost and Cash Value Insurance
When you purchase renters' insurance, there are two basic types to choose: replacement cost or cash value insurance. With replacement cost coverage, the insurer will pay you enough to replace the item that was lost or destroyed, up to your policy limits. With cash value insurance, you’ll be paid no more than the current value of the item, up to your policy limits. If it’s old or obsolete, this could be much less than what you paid for an item and what it costs to replace. As you’d expect, replacement value insurance costs more than cash value coverage.