Insurance needs, taxes and regulations for renting out a home in Massachusetts

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Do you rent out your home on Airbnb or similar sites? For more than 14 nights a year? Less than 15 nights a year?

Make sure you are “in the know” about the new insurance needs, taxes and regulations for renting out a home in Massachusetts:

Quick facts:

  • All short-term rentals must be insured and registered with the state of MA
  • People or businesses who offer rentals for less than 15 nights a year are exempt from tax
  • People or businesses that offer rentals more than 14 nights a year are subject to the states 5.7% hotel tax

Official Insurance Requirements – Short Term rentals (MAIA Special Bulletin):

1) Operators must maintain liability insurance of not less than $1,000,000 to cover each short-term rental, unless such short-term rental is offered through a hosting platform that maintains equal or greater coverage. Such coverage shall 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.

2) Prior to an operator offering a short-term rental through the use of a hosting platform, the hosting platform shall provide notice to the operator that standard homeowners or renters insurance may not cover property damage or bodily injury to a third-party arising from the short-term rental.

3) Insurers that write homeowners and renters insurance may exclude any and all coverage afforded under the policy issued to a homeowner or lessee for any claim resulting from a short-term rental of any accommodation. Insurers that exclude short-term rental coverage shall not have a duty to defend or indemnify any claim expressly excluded by a policy.

4) Any policy or policy form intended to cover operators of short-term rentals from liabilities, whether the policy or policy form is provided by a hosting platform or an operator itself, shall be filed according to instructions provided by the Division of Insurance.

5) An operator who intends to operate a short-term rental shall provide notice to any insurer that writes a homeowners or renters insurance policy for the property where such short-term rental is to be located of the operator’s intent to operate such short-term rental.

Short term rentals are defined as:

  • An owner- occupied, tenant occupied or nonowner occupied property including but not limited to:
    • Apartment
    • House
    • Cottage
    • Condo
    • Furnished accommodation that is not:
      • Hotel
      • Motel
      • Lodging house
      • Bed and breakfast establishment
  • At least 1 room or unit is rented to an occupant or sub occupant
  • All accommodations are reserved in advance
  • Private owner-occupied property is to be considered a single unit if leased or rented

Providing Peace of Mind Through Proactive Service

Deland, Gibson: a Trusted Choice, Five Star Accredited independent insurance agency. Established in Massachusetts in 1900, Deland, Gibson is a 4th generation family-run insurance agency that has thrived working as a trusted advisor for its client base. We work with individuals and businesses to lower their Total Cost of Risk. We analyze a client’s direct and indirect costs and implement risk reduction plans to address areas of business, hazard, or strategic risk.

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