Dothan, AL Short-Term Rentals: Insurance Requirements (2026)

City Code § 114-188 sets Dothan's short-term rental rules through the zoning chapter rather than a general insurance statute. Any short-term commercial rental (STCR), meaning a non-owner-occupied home rented whole to guests, located in a single-family zoning district needs a special exception from the Board of Zoning Adjustment, and § 114-188(b)(9) lists the fixed conditions attached to that exception. Paragraph e requires 'proof of coverage under a homeowner's property insurance policy' before the exception is granted. The requirement carries forward into the annual renewal of the STCR's business license: § 114-188(c) requires the owner, when renewing, to provide proof of current property insurance, which may take the form of declarations, information, or summary pages from the policy showing the amount of coverage.

Renewal also requires proof that City of Dothan lodging taxes were paid for the preceding year, or a copy of zero-dollar returns if none were owed, plus payment of the business license tax itself. Because the insurance condition is listed among those the Board of Zoning Adjustment shall not vary, an applicant cannot obtain the special exception without it, and a host who lets the coverage lapse risks losing the annual business license renewal along with the special exception underlying the STCR's legal operation. The Planning and Development Department administers the special exception file and the business license office administers the renewal, so proof of insurance effectively has to be current at two separate checkpoints: initial approval and each annual renewal cycle.