Tuscaloosa, AL Short-Term Rentals: Insurance Requirements (2026)
Key Facts
- Minimum coverage
- $1,000,000 liability and injury
- Accepted policy types
- homeowner's rider or commercial policy
- Additional insured
- City of Tuscaloosa, officers, employees
- Cancellation notice
- 45 days' written notice to city
Summary
Every Tuscaloosa short-term rental host must carry at least $1,000,000 in liability and personal injury coverage before the city will issue a business license. The policy can be a homeowner's rider written specifically for short-term rentals or a standalone commercial policy, and it has to name the city as an additional interested party.
(a)Every person in the city or its police jurisdiction who wishes to obtain a license to conduct a short-term rental business pursuit to Section 7-200 must provide proof of the following insurance coverage:1.A rider on a homeowner's policy that expressly covers short-term rentals and provides a minimum of one million dollar ($1,000,000.00) liability and personal injury coverage; or2.A commercial insurance policy covering short-term rentals at the permitted address that provides a minimum of one million dollar ($1,000,000.00) liability and personal injury coverage.(b)Insurance required above shall be without prejudice to coverage otherwise existing and shall name, as an additional interested party, the city, its officers and employees and shall provide that the policy shall not terminate or be cancelled prior to the completion of the permit period without forty-five (45) days written notice to the city at the address shown in the permit agreement.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Code of Ordinances: Supplement 102).
Full Breakdown
Sec. 7-203(a) requires anyone applying for a short-term rental business license under Sec. 7-200 to prove one of two kinds of coverage: a rider added to a homeowner's policy that expressly covers short-term rentals and carries at least one million dollars ($1,000,000.00) in combined liability and personal injury coverage, or a standalone commercial policy covering short-term rentals at the specific licensed address with the same one million dollar minimum. A generic homeowner's policy that does not specifically extend to short-term rental use does not satisfy this section.
Sec. 7-203(b) adds two conditions to that coverage: it must be carried without prejudice to any other insurance the owner already has, and the policy must name the City of Tuscaloosa, along with its officers and employees, as an additional interested party. The insurer also cannot cancel or let the policy lapse during the permit period without first giving the city forty-five (45) days' written notice, sent to the address the owner listed in the permit agreement. That notice window gives the revenue division time to act on the short-term rental license before a gap in coverage occurs, since the license issued under Sec. 7-200 depends on continuous proof of this insurance.
Violations & Fines
A short-term rental application is not complete, and a license will not issue or renew, without current proof of the required $1,000,000 policy naming the city as an additional interested party. Letting the coverage lapse, or an insurer cancelling without the required 45-day notice to the city, exposes the license to suspension or non-renewal by the revenue division under Sec. 7-200.
Frequently Asked Questions
How much liability insurance does a Tuscaloosa short-term rental need?
Does my regular homeowner's policy satisfy the requirement?
What happens if my insurer cancels my policy mid-year?
Sources & Official References
Other rules in Tuscaloosa
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