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Things to know about for short term rental properties

Navigating Insurance and Regulations for Your Short-Term Rental Property

Picture of home for use Short Term Rental Property blog by Huff Insurance.In the dynamic world of short-term rentals, platforms like Airbnb and VRBO have changed how we think about travel and accommodations.

Are you a property owner delving into this lucrative market?  It is crucial to understand the insurance implications and local regulations that come with operating a short-term rental. Here’s what you need to know to ensure your venture is both profitable and protected.

Understanding Insurance Needs for Short-Term Rentals

1. Homeowners Insurance May Not Suffice Your standard homeowners insurance typically covers your property for personal use. However, when you rent out your property, even on a short-term basis, it’s often considered a commercial activity. This means your regular policy might not cover damages or liabilities arising from rental activities.

2. Specialized Short-Term Rental Insurance To fill this gap, consider a policy specifically designed for short-term rentals. These policies often provide comprehensive coverage, including property damage, liability, and loss of rental income. They’re tailored to address the unique risks associated with short-term rental.  Such as frequent guest turnover and the potential for property misuse.

3. Platform-Provided Coverage Platforms like Airbnb offer their own form of coverage. For example, Airbnb’s Host Protection Insurance provides primary liability coverage for up to $1 million per incident. While this is a helpful layer of protection, it’s important to understand its limitations and consider additional insurance to cover all bases.

Complying with Local Ordinances and HOA Rules

1. Zoning Laws and Local Ordinances Local ordinances can greatly impact your ability to operate a short-term rental. These laws vary widely depending on your location and can include restrictions on the type of property that can be rented out, the duration of the rental, and even the total number of days per year your property can be rented. Ignoring these laws can lead to hefty fines and legal challenges.

2. HOA and Community Rules If your property is part of a homeowners’ association (HOA) or a similar community organization, you need to be aware of their specific rules regarding short-term rentals. Some HOAs strictly prohibit them, while others may have guidelines you must follow. Violating these rules can result in fines or legal action from the HOA.

3. Licensing and Permits In many areas, you’ll need to obtain a license or permit to legally operate a short-term rental. This process might involve inspections, fees, and adhering to safety regulations. Ensure you’re fully compliant to avoid legal complications.

Practical Steps for Short-Term Rental Owners

  1. Review Your Current Insurance Policy:  Speak with your insurance agent.  They will help you understand what your current policy covers and what additional coverage you might need.
  2. Investigate Local Regulations: Research local laws and ordinances related to short-term rentals.  This might involve visiting your local government’s website or consulting with a legal expert.
  3. Check with Your HOA: If applicable, review your HOA’s rules and regulations.  Or, speak directly with the HOA board to understand any restrictions or requirements.
  4. Consider Additional Safety Measures: Implement safety measures like smoke detectors, carbon monoxide detectors, and first aid kits.  Not only will this enhance guest safety, but it can also be favorable in the eyes of insurance providers.
  5. Stay Informed: Regulations and insurance requirements can change. Stay informed about local laws and industry trends to ensure continuous compliance and protection.

The 3 most important factors in real estate – Location, Location and Location

In addition to understanding the insurance implications and local regulations for short-term rentals, it’s beneficial to consider the appeal of various locations in Maryland. Each area offers unique attractions and characteristics that can influence the demand and profitability of your rental property. Some of these popular locations include:

  • Annapolis, MD: Known for its rich history and maritime charm, Annapolis boasts a range of properties, from modern apartments to historic homes, ideal for short-term rentals.
  • Ocean City, MD: A prime beach destination, Ocean City is perfect for rentals seeking to cater to vacationers looking for sun, sand, and entertainment.
  • Deep Creek Lake, MD: This area is a haven for outdoor enthusiasts, offering year-round activities like boating, skiing, and hiking, making it an excellent location for nature-centric rentals.
  • Baltimore Inner Harbor: Offering urban attractions and cultural experiences, Baltimore’s Inner Harbor is a great spot for those who prefer a city vibe.
  • Bethesda, MD: Known for its upscale dining and shopping, Bethesda attracts a mix of business and leisure travelers, ideal for short-term luxury rentals.

Incorporating properties in these areas into your short-term rental portfolio can diversify your offerings and appeal to a broader range of guests.


Operating a short-term rental property can be a rewarding venture.  But it comes with its set of responsibilities. Properly understanding and managing the insurance implications and following local regulations are essential steps in ensuring the success and sustainability of your rental business. By being proactive and informed, you can navigate these challenges and make the most of your investment in the booming short-term rental market.

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