Purpose

This act creates a new, separate framework to regulate short-term rental guarantees offered through online rental platforms. It sets rules for how these guarantees are backed, disclosed, and enforced, and it establishes oversight by the Minnesota Commissioner of Commerce. The bill treats these guarantees as not insurance, but requires insurers to back the guarantees through a specific reimbursement insurance policy.

Key terms and definitions

• platform contract holder: the platform user who benefits from or holds a rental home marketplace guarantee
• provider: the rental home marketplace, or its affiliate or representative, that issues and administers the rental home marketplace guarantee
• rental home marketplace: an online platform or service that advertises, offers, or connects people to rental properties and may offer marketplace guarantees as part of its business
• rental home marketplace guarantee: a contract related to a rental on a marketplace that may reimburse a renter for damages the renter is responsible for under the platform’s terms of service
• reimbursement insurance policy: an insurance policy that backs the provider’s obligations under the rental home marketplace guarantee, paying the platform contract holder if the provider fails to perform
• not insurance: the guarantee itself is not considered insurance, but must be backed by a reimbursement insurance policy
• commissioner: the Minnesota Commissioner of Commerce
• terms of service: the rules and conditions of using the rental platform, including any transferability, termination, or exclusions

Main provisions (what the bill requires or allows)

• Providers must make the terms of the rental home marketplace guarantee available on their website and must comply with the act to issue or offer guarantees.
• Providers must register with the Commissioner of Commerce and pay an annual fee of $750.
• Each provider obligated to a platform contract holder must insure all guarantees under a reimbursement insurance policy issued by a Minnesota-licensed insurer (or under applicable state insurance statutes).
• The guarantee itself is not insurance and is not required to follow other Minnesota insurance laws if the provider meets the act’s requirements.
• Reimbursement insurance policies must:
  • state that the insurer will pay on behalf of the provider to satisfy the provider’s obligations under the guarantee if the provider defaults or does not perform
  • follow rules about termination and nonrenewal, and a policy termination does not relieve the insurer of obligations for guarantees issued before termination
  • designate the insurer and authorize subrogation or indemnification against the provider if the insurer pays
• The consumer disclosures and protections require:
  • clear statements that the guarantee is not insurance
  • a notice that the provider’s obligations are backed by a reimbursement insurance policy
  • if the provider fails to perform within 180 days after proof of loss, the platform user may file a claim directly with the insurance company, under the policy terms
  • guarantees must be written in clear language and specify terms, limitations, conditions, exclusions, and transferability or termination
  • providers may not make false or misleading statements about the guarantee or omit material information

Notable changes to existing law

• Establishes a distinct regulatory category for rental home marketplace guarantees, separate from traditional insurance.
• Introduces a formal requirement for reimbursement insurance backing, linking platform guarantees to an insurer’s policy rather than treating guarantees as standard insurance.
• Creates ongoing oversight by the Commissioner of Commerce, including registration, annual fees, and enforceable disclosure standards.
• Clarifies consumer rights to pursue insurance direct claims after a certain period, creating a pathway between platform guarantees and insurance protections.

Enforcement and oversight

• The Commissioner of Commerce is responsible for ensuring compliance with the act and with the reimbursement insurance policies.
• Enforcement aligns with existing authorities under Minnesota’s Chapter 45 and Chapter 60A for insurance-related matters.

Relevant terms - rental home marketplace guarantee - reimbursement insurance policy - platform contract holder - provider - rental home marketplace - not insurance - commissioner of commerce - registration fee - proof of loss - indemnity - subrogation - disclosure language - terms of service - termination and nonrenewal - consumer protection and disclosures - enforcement (Chapter 45, Chapter 60A)