Merced, CA Short-Term Rentals: Insurance Requirements (2026)

There is no city-imposed insurance requirement for short-term rentals in Merced because the city has not adopted a short-term-rental ordinance, and a search of the Municipal Code found no minimum liability coverage figure for STRs, vacation rentals, or homestays. The Transient Occupancy Tax chapter (Chapter 3.08) addresses tax collection and registration only and says nothing about insurance, and the bed and breakfast provisions in Section 20.44.030 set permit, owner-occupancy, room, meal and parking standards without an insurance mandate. As a result, a host's insurance obligations come from sources outside the city code: the terms of any mortgage, the host's own homeowner or landlord/dwelling policy, and the host-protection or liability programs offered by booking platforms such as Airbnb or Vrbo. Those platform programs are contractual coverages between the host and the platform, not requirements the City of Merced enforces. Hosts should be aware that standard homeowner policies often exclude commercial or short-term-rental activity, so additional coverage may be advisable as a business matter even though the city does not require it. This contrasts with some California STR ordinances, and with the unincorporated Merced County approach to regulated rentals, where insurance or indemnification can be conditions of a permit; the City of Merced has no such permit and therefore no insurance condition. Confirm current requirements with the city before relying on the absence of a mandate.