Farmington Hills, MI Short-Term Rentals: Insurance Requirements (2026)

Public-facing summaries of the Farmington Hills September 2023 short-term rental ordinance (Zoning Text Amendment 3, 2023, and related Chapter 9 amendments) reference 'liability insurance' as a registration condition but do not publish a specific minimum coverage amount in the publicly searchable Municode text. Operators should confirm the current insurance condition directly with the Farmington Hills Building Division at (248) 871-2450 or code.enforcement@fhgov.com before submitting a rental registration application, and should request the current rental dwelling registration application form (which typically lists any specific liability coverage minimum, additional-insured requirements, and proof-of-coverage documentation requirements). The Building Division's published administrative practice for rental registration generally requires the operator to maintain liability insurance covering the rental activity and to provide evidence of coverage at registration and renewal; the specific dollar minimum is set by administrative practice rather than by codified ordinance language. Independent of the codified minimum, operators face material liability exposure that the standard Michigan homeowner's HO-3 policy does not cover. The Insurance Services Office (ISO) standard HO-3 form contains a 'business pursuits' exclusion that voids coverage for paid short-term rental activity; a guest injury (slip-and-fall, hot-tub injury, pool incident, dog bite), fire, water damage, smoke damage, or third-party claim (neighbor's vehicle damage, ambient noise litigation) arising from a paid rental can leave the operator personally liable for defense costs, judgments, and settlements that for serious injury claims in Oakland County have run into seven figures. Three coverage approaches are commonly used by prudent Detroit-metro STR operators: (1) a short-term-rental endorsement (sometimes called a 'home-sharing' or 'rental-to-others' endorsement) on the existing homeowner's policy, available from several Michigan carriers (Auto-Owners, Citizens, Foremost) for an annual premium typically in the $250-$700 range; (2) a dedicated commercial short-term rental policy issued by carriers such as Proper Insurance, Steadily, CBIZ, or Foremost, with liability limits typically of $1,000,000 to $2,000,000 plus building, contents, and loss-of-rent coverage; or (3) a landlord/rental dwelling (DP-3 form) policy with STR activity layered in. Platform host-protection programs provide important supplemental coverage but should not be the sole reliance: Airbnb's AirCover for Hosts provides up to $1M in liability coverage for platform-booked stays plus up to $3M in damage protection, but contains documented coverage gaps (excludes off-platform direct bookings, claim-handling delays, exclusions for intentional acts and certain property categories); VRBO's Liability Insurance similarly provides up to $1M for platform-booked stays. Insurance professionals widely treat platform coverage as supplemental rather than primary. Michigan's no-fault auto insurance system (MCL 500.3101 et seq.) does not extend to STR liability for guest injuries or property damage on the rental premises. Operators should also confirm any HOA covenant insurance requirements - some Farmington Hills HOA covenants independently require minimum liability coverage and require the HOA to be named as additional insured.