Typically, it is more expensive to insure a vacation rental property than it is to insure a rental property. For a rental property with a long-term tenant, you can obtain a landlord policy. A landlord policy will offer replacement cost coverage for the property as well as personal liability coverage and income replacement in the event that a tenant needs to move out of a property while repairs take place due to damage from a covered loss. The renter should also hold a separate, renters insurance policy which will cover the tenant’s personal property in the event of a loss.
Vacation rental properties are generally more expensive to insure for a couple of reasons. Insurance companies tend to view short term rentals as a higher risk than a monthly lease. In addition, vacation rentals are viewed as a business and therefore must be insured differently. Insurance of this nature will typically provide coverage for the building, its contents, commercial business liability, and business income replacement. Because vacation rental insurance is more comprehensive, it will cost more to insure a property being used for short term rentals as opposed to a long term monthly tenant.