Fayetteville, NC Short-Term Rentals: Insurance Requirements (2026)

Fayetteville's Unified Development Ordinance and city code do not contain an STR-specific insurance clause. Because NCGS 160D-1207(c) and the North Carolina Court of Appeals decision in Schroeder v. City of Wilmington restrict cities from operating mandatory short-term rental registries, Fayetteville has not adopted a registration scheme that would require submission of a certificate of insurance. There is no general state-law requirement that an STR host carry commercial general liability coverage; instead, coverage is governed by private contract: a standard homeowners (HO-3) policy typically excludes business activity, so most carriers require either a home-sharing endorsement or a separate dwelling/landlord (DP-3) or commercial short-term rental policy when a property is rented for fewer than 30 days at a time. Airbnb provides Host Liability Insurance with a $1 million per-occurrence limit and Host Damage Protection up to $3 million through its AirCover program for stays booked through the platform, and Vrbo offers a comparable $1 million Liability Insurance program; both function as excess or contingent coverage and do not replace a host's primary policy. NCGS Chapter 42A, the North Carolina Vacation Rental Act, governs written rental agreements for residential vacation rentals of fewer than 90 days but does not impose a separate insurance obligation. Mortgage lenders and HOA or condominium declarations frequently require named-peril dwelling coverage and a stated liability minimum (commonly $300,000 to $1,000,000) and may require the lender or association to be named as additional insured. Hosts collecting occupancy tax also need to evaluate whether their policy excludes intentional or commercial use; coverage gaps can leave the host personally liable for guest injuries or property damage.