Updated April 2023
By now, most of you are aware that as of July 1, 2019, Chapter 337 of the Acts of 2018 requires that operators of short-term rentals must maintain liability insurance of not less than $1,000,000 to cover each short-term rental. So, take a look at your current policy to determine the amount of liability coverage you have. If it’s not adequate, the first step is to contact your insurance agent.
To start, make sure that your agent is aware that you are renting your home. This is very important as a short-term rental home can be denied coverage under a primary homeowner insurance policy.
If you are currently insured through the Mass Fair Plan (MPIUA), which caps its liability coverage at $500,000, or your policy with another carrier is less than $1M in liability, you have a couple of options to comply with the state requirement:
- Take out an umbrella policy to supplement your current one.
- Obtain a new policy from an insurance carrier that offers coverage for your rental home and meets state requirements.
The Massachusetts Insurance requirements for short-term rentals may seem excessive. However, there is no question that it’s in the best interests of vacation rental homeowners to be adequately protected as we open our homes to strangers.
FYI: A company that I have seen mentioned on web in various places as a source for rental liability insurance is CBIZ so I contacted them just to see as alternative to what I have now. They wouldn’t touch my place because I still have perfectly valid but older fuse boxes and the cost to convert those is prohibitive.