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

Unlike cities that require hosts to carry a stated liability minimum (commonly $1,000,000 per occurrence) as a condition of an STR permit, the City of Montgomery has not enacted an ordinance setting a specific insurance floor for short-term rentals. STR activity is licensed through the standard municipal business license issued under Section 11-51-90, Code of Alabama 1975, and through registration for the 4% city lodgings tax under the city's lodgings tax provisions and Code of Alabama Sec. 40-26-1. Because Montgomery does not impose a permit-level insurance condition, coverage is driven by: the host's own homeowner or landlord policy (most standard HO-3 policies exclude or limit short-term commercial use); platform-provided host protection programs (such as Airbnb's AirCover or Vrbo's Liability Insurance) which are contractual and not city-mandated; and any lender or HOA requirement applicable to the property. Hosts in licensed lodging classifications under the city's business license schedule should confirm with their insurer that the use is properly disclosed; misrepresenting use can void coverage at the time of a claim. If the city enacts a future STR ordinance, that ordinance would be the first source of any binding minimum.