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Advisory board backs higher liability coverage for VHRs; clarifies renewal and North-of-Cave-Rock rules
Summary
Douglas County staff explained a proposed increase in required liability insurance for short-term rentals to $1 million, and discussed a 30‑day renewal window and North-of-Cave-Rock rental exception allowing rentals among residents inside permitted communities.
Douglas County staff told the VHR Advisory Board the county plans to raise required liability insurance for short-term rental permits and clarified renewal procedures and geographic exceptions that the Board of County Commissioners previously adopted.
Staff described two linked insurance changes: increasing the standard required commercial liability from $500,000 to $1 million for many VHR tiers, and requiring that the county be listed as an additional interest on the policy so the county receives cancellation notices. The change reflects short-term-rental insurers increasingly offering $1 million policies labeled for short-term rentals (often called STR coverage).
“...what a lot of policies are being written out a million dollars because the 500,000 is not enough, apparently,” Douglas County staff member Ernie Strehlow said, explaining brokers’ input on current policy limits.
The board also discussed renewal timing. Staff explained an existing settlement-related provision allowing a 30-day window after a permit expiration for an application to be treated as a renewal rather than a new application; staff said the 30 days preserves permit continuity in limited circumstances (for example, an interrupted online filing), but does not extend the permit term or prevent wait-list consequences if capacity constraints apply.
AJ Haynes, a county planning staffer, noted the 30-day element stems from a settlement with homeowners concerned about losing existing permits if they missed a deadline: “One of their big concerns was, what if I miss my deadline? I don't wanna lose my permit and then be placed on a wait list and never be able to get my permit back because the wait list is so long.”
The board also revisited a geographic exception for areas north of Cave Rock. Haynes said the BOCC had crafted a compromise that prohibits typical tourist transient rentals north of Cave Rock, while allowing residents in those remote communities to rent to one another — effectively limiting rentals to people with an established connection to that community rather than outside tourists. “The compromise was ... if you live in one of these areas that has an HOA where there can be sort of restrictions imposed on the renters, then we'll allow them to rent to each other and that is all,” Haynes said.
Board members asked for clarity on how these changes would affect costs for occasional owner-renters and whether the county has data on how many permit holders would be affected. Some members said higher insurance limits could increase operating costs for occasional renters; others said many policies already carry $1 million limits.
Staff indicated the additional-interest change is administrative: the county will be notified if an insurer cancels a policy, helping enforcement staff know when coverage lapses. The board did not take a formal vote but generally agreed to the insurance and renewal clarifications and directed staff to incorporate the agreed language into the draft ordinance for further review.
