Massachusetts law requires operators of short-term rentals to maintain at least $1,000,000 in liability insurance for each short-term rental, unless the rental is offered through a hosting platform that maintains equal or greater coverage. This coverage must defend and indemnify the operator, and any tenants or owners in the building, for bodily injury and property damage arising from the short-term rental.
Be sure to check the liability portion of your policy, not just the property coverage amount. Mass.gov notes that even if a policy insures the property itself for $1 million, the liability limit may be lower, and you would still need the full required liability coverage.
Before renting, contact your insurance agent and make sure they know that you are using the property as a short-term rental. Massachusetts law requires short-term rental operators to notify the insurer that writes the homeowners or renters policy for the property. Mass.gov also warns that the insurance company may have the legal right to cancel coverage if it is not made aware of the short-term rental use.
Do not assume that a standard homeowners or renters policy covers short-term rental activity. The law allows insurers to exclude claims arising from short-term rentals, and Mass.gov notes that typical home or renters policies may not cover property damage or injury costs when the property is being rented to someone else.
Some hosting platforms or online listing services may provide liability coverage that satisfies Massachusetts’ $1 million requirement. WeNeedaVacation does not provide liability insurance for listed properties, so homeowners are responsible for confirming that they have the required coverage through their own insurance policy or another qualifying source. Mass.gov notes that the Division of Insurance does not review individual hosting platform coverages, so operators should confirm any third-party coverage directly with the platform, a licensed insurance producer, or an attorney.
If your current policy or other qualifying coverage does not provide the required liability protection, ask your insurance agent about options such as a supplemental dwelling policy, umbrella or excess liability coverage, or a specialized short-term rental insurance product before offering the home for rent.
For more information, visit Mass.gov’s Short-Term Rental Insurance page.