Flagstaff, AZ Short-Term Rentals: Insurance Requirements (2026)

Flagstaff City Code § 3-12-001-0011 requires that, prior to offering or renting a short-term rental, the owner obtain liability insurance covering the STR in the aggregate of at least $500,000, or advertise and offer the STR exclusively through an online lodging marketplace that itself provides equal or greater coverage. Many national booking platforms extend host liability protection near or above that figure, which is why the ordinance lets a marketplace's coverage substitute for a standalone policy rather than requiring owners to layer a separate policy on top of platform protection.

The insurance duty sits inside Chapter 3-12's short-term rental licensing scheme alongside the background-check requirement of § 3-12-001-0012 and the public-safety equipment rules of § 3-12-001-0013, and it took effect with Ordinance 2026-11 on May 19, 2026. Because § 3-12-001-0011 is a precondition to offering or renting the STR, and not merely an application checkbox, an owner who lets the coverage lapse while still advertising or accepting bookings is out of compliance with the chapter even if the STR license itself remains active. The City's licensing system does not independently verify carrier coverage limits, but a lapse that surfaces during a complaint or renewal review exposes the owner to enforcement under the chapter's general violation and penalty provisions, including the escalating civil penalties in § 3-12-001-0015 and the license suspension grounds in § 3-12-001-0014.