The Ice Patch Problem: An Insurance Blind Spot for Ski-Season Rental Owners
Every winter, mountain homes, condos and cabins throughout the Roaring Fork Valley welcome guests who have traveled from across the country. For property owners, short-term rentals can provide meaningful income when the place isn’t being used personally.
But opening your property to paying guests changes more than who holds the keys. It can also change how your insurance responds when something goes wrong. Many owners assume their homeowners policy or the booking platform’s protection will take care of an unexpected loss. That assumption is worth checking before the first guest arrives.
Your homeowners policy may not cover paying guests
A standard homeowners policy is primarily designed for personal residential use. Many policies limit or exclude coverage once you start renting to guests, even for a few weeks a year, and some treat rental use as a business activity. If a guest gets hurt or something gets damaged during a paid stay, a claim may be limited or denied.
Policies differ a lot from one company to the next, and some allow occasional rentals with an add-on. The only way to know is to ask before you list your place.
Booking-platform protection has its limits
Platforms such as Airbnb and VRBO offer protection for certain guest-related losses, but not all protection works the same way. Liability coverage for guest injuries is different from protection for damage to your property, and each has its own terms, limits and exclusions. Some of it is not insurance at all.
Even if your booking platform provides protection, it may not address every risk that comes with owning and renting your property. Review it alongside your own insurance rather than assuming one replaces the other.
Three kinds of protection to understand
- Property coverage helps pay to repair or replace your building and belongings after a covered loss, like a fire or a burst pipe. Damage or theft by guests may be excluded or subject to special conditions, even under some rental policies.
- Liability coverage may help with legal defense costs and covered claims if you’re held legally responsible for a guest’s injury or damage to someone else’s property.
- Loss of rental income can help replace booking income if a covered physical loss makes your place unusable. Not every policy includes it, and waiting periods, limits and other restrictions may apply.
Common ways owners get covered
- An add-on to your homeowners policy. If you live in the home and rent it only now and then, some companies offer an endorsement for occasional rentals.
- A policy written for short-term rentals. If you rent frequently or don’t live in the property, you may need a policy specifically designed or endorsed for short-term rental activity. Not every landlord policy permits stays of just a few nights, so the insurer needs to understand exactly how the property is used.
- Business coverage. If you own several rental properties, it’s worth looking at commercial coverage that fits a rental business.
Which one fits depends on how often you rent, whether you live there, and what the insurance company will accept. Keep in mind that an umbrella policy may not cover liability arising from rental activity unless that exposure is eligible and properly insured, so ask before you rely on one.
Three ski-town situations to ask about
| Situation | Questions about a standard homeowners policy | What a policy written for rentals may offer |
|---|---|---|
| A guest slips on icy steps | Does it cover injuries to paying guests, or is rental use limited or excluded? | May include liability coverage for guest injuries. Terms and limits vary by policy. |
| Pipes freeze and burst during a stay | Does it apply if the home is being rented? Are there conditions about heat or vacancy? | May cover property damage and, with the right option, lost rental income. Check for freeze-related conditions. |
| A guest is injured at the hot tub or fireplace | Is liability for guests’ injuries limited when the property is rented? | Coverage may be available under a rental or business liability option. Ask about any exclusions. |
Other things that can go wrong: damage or theft by guests, and a kitchen or fireplace fire. Each policy handles these differently, so ask.
Questions to ask before your first booking
- Does my current policy allow short-term rentals, and how many nights a year?
- If I rent, will my property and liability coverage still apply to a guest’s stay?
- Do I need a different type of policy because of how often I rent or because I don’t live there?
- Is my liability limit high enough? Would an umbrella policy make sense?
- Does my coverage include lost rental income after a covered loss?
- What does the booking site’s protection cover, and where does my own policy take over?
Before you welcome guests
Short-term rental requirements vary throughout the Roaring Fork Valley. Depending on where your property is located, you may need a permit, business license, safety inspection or tax registration. Condominium associations and HOAs may have additional restrictions, and rules and fees change. Confirm the details with your local jurisdiction and property association before accepting reservations. These official pages are a good place to start:
- Town of Carbondale — short-term rental license
- City of Glenwood Springs — vacation rentals
- City of Aspen — short-term rental permit and lodging and STR taxes
- Town of Snowmass Village — short-term rentals
- Basalt and neighboring counties: contact the Town of Basalt, Pitkin County, Garfield County or Eagle County
- Colorado Department of Revenue — state sales tax information