Waukegan, IL Short-Term Rentals: Insurance Requirements (2026)

The Waukegan Unified Development Ordinance, adopted on July 1, 2024, and Chapter 14 (Licenses and Miscellaneous Business Regulations) of the Code of Ordinances do not contain a stand-alone short-term rental insurance requirement. By contrast, Waukegan's general business license process administered by the Business Licensing Department (847-599-2500) coordinates approvals from Fire, Building, and Planning and Zoning. Operators should confirm with the Business Licensing Department whether a certificate of insurance is required as part of the application packet for their specific zoning district and dwelling type. Because Waukegan is a home rule municipality under the Illinois Constitution, the City may impose insurance conditions through a Conditional Use Permit issued under the UDO when an STR is allowed only conditionally. At the state level, Illinois has no statute setting a numeric minimum liability limit for STRs (the Illinois Hotel Operators' Occupation Tax Act, 35 ILCS 145, is a tax statute and does not impose insurance limits). Waukegan hosts typically rely on Airbnb Host Liability Insurance or Vrbo Liability Coverage, each of which provides up to $1,000,000 per occurrence on covered platforms, paired with a homeowner or landlord policy endorsed for short-term rental activity, because most standard homeowner policies exclude commercial or transient-rental use. Hosts should also confirm that any HOA or condominium declaration applicable to the unit does not impose its own STR insurance minimum.