What is the necessity of additional insurance coverage for STR?

[Mike S.]

I am starting my first Airbnb property in Sedona, AZ. I have seen so many posts that recommend different types of insurance coverage such as property, umbrella coverages,.. for STR from different providers like Proper, Foremost,.. . I know that Airbnb offers $3M for property damage and $1M liability. Vrbo also offers overall $1M. I am planning to post on both patform. My question is why I need any extra coverage and if so, what type of extra coverage? I mean liability, property damage, bedbugs, loss (make up for no occupancy during fixing damage), etc.? As I said I am new and I truly appreciate detailed response

[Patricia Steiner]

It's not so much that you need 'additional' insurance - as you need the RIGHT insurance.  Vacation Rentals are classified as a business and require commercial insurance.  Without that policy, as soon as a claim is made, it would be denied and the coverage cancelled.  The industries take on vacation rental insurance is: 'the risks associated with renting out a property for use as a vacation rental, such as property damage and liability for injuries to guests, are higher."  And, in most states, you will be required to have a vacation rental license with the muncipality and/or state.  In Florida, both are required.  And, as far as those host insurance policies you referenced, they are not insurance policies:  "The HLI program does not insure Hosts for damage or loss to their own property or Accommodation. For damage to a Host’s property, learn about Airbnb’s Host damage protection program. Host damage protection isn’t an insurance policy." (End, source: AirBNB)

Contact a couple of insurance brokers who offer vacation rental policies and get a policy that protects your investment and minimizes your risk.  Building wealth means nothing if you don't preserve it.  Learn more...