Vacation Rental / Short-Term Rental Insurance in Washington State

Vacation rental operators in Washington face a risk profile that sits uncomfortably between residential homeownership and commercial hospitality — and most hosts don't realize their standard homeowners policy doesn't cover either scenario. The moment you start accepting paying guests, whether through Airbnb, VRBO, or direct bookings, your property transitions from a personal residence to a commercial operation, and your homeowners insurance almost certainly contains an exclusion for business activity on the premises. If a guest is injured and you file a claim, your carrier can deny it based on that exclusion, leaving you personally liable.

Platform-provided insurance programs — Airbnb's Host Protection Insurance and VRBO's Liability Insurance — are frequently misunderstood by hosts as comprehensive coverage. They are not. These programs are designed to protect the platform first and the host second. They contain significant limitations: exclusions for certain property types, caps on damage amounts, slow claims processes, and gaps for incidents that occur outside the rental period or involve non-guest third parties. A neighbor injured by a falling tree limb from your vacation rental property, for example, may not be covered under platform insurance at all. Hosts who rely solely on platform coverage are gambling with their most valuable asset.

Washington adds regulatory complexity that directly affects insurance needs. Short-term rental regulations vary dramatically by jurisdiction. Seattle requires a short-term rental operator license and limits the number of units a host can operate. San Juan County has its own permitting requirements. Leavenworth, Chelan, and other popular vacation destinations each impose different rules on rental frequency, occupancy limits, and safety requirements. Operating without the required permits doesn't just expose you to fines — it can void your insurance coverage entirely if a carrier determines you were operating illegally when a loss occurred.

The physical risks are substantial and specific to the hospitality use case. Guests unfamiliar with your property are more likely to be injured than long-term tenants who know every uneven step and low doorframe. Hot tubs, fire pits, waterfront access, and outdoor recreation amenities — features that drive bookings — dramatically increase liability exposure. Guest-caused property damage is a constant reality: broken furniture, stained carpets, kitchen fires, and plumbing mishaps from misuse. And in Washington's outdoor recreation markets — the San Juan Islands, the Olympic Peninsula, ski areas near Leavenworth and Crystal Mountain — many vacation rentals include amenities like kayaks, bikes, or hiking trail access that create additional injury liability the operator may not have considered.