Short-Term Rental Insurance
Short-term rental insurance is specialized coverage designed for the unique risks of operating vacation rental properties. Standard homeowner's insurance typically excludes commercial rental activity, leaving hosts exposed to liability claims, property damage, and loss of income. STR-specific policies cover guest-caused damage, liability for guest injuries, loss of rental income, theft, and business interruption. Providers like Proper Insurance, Safely, and CBIZ specialize in this market. Property managers should ensure every property in their portfolio has appropriate STR coverage.
Frequently Asked Questions
Does homeowner's insurance cover Airbnb rentals?
No — most standard homeowner's insurance policies exclude coverage for commercial short-term rental activity. You need dedicated STR insurance or a specific endorsement. Airbnb's Host Protection Insurance provides some coverage but has significant limitations and gaps.
What does short-term rental insurance typically cover?
Comprehensive STR insurance typically covers guest-caused property damage, liability for guest injuries on the property, theft by guests or third parties, loss of rental income due to covered events, business interruption, bed bug remediation, and legal defense costs. Specialized STR policies from providers like Proper Insurance, Safely, and CBIZ are designed to fill the gaps left by standard homeowner's insurance and OTA host protection programs.
How much does short-term rental insurance cost?
Short-term rental insurance typically costs $2,000-$5,000 annually per property, depending on the property value, location, coverage limits, and claim history. This translates to roughly $150-$400 per month. Some providers offer per-booking or per-night coverage models that may be more cost-effective for lower-occupancy properties. The cost is generally 1-3% of annual rental revenue and should be factored into operating expenses when calculating NOI.
Is Airbnb Host Protection Insurance enough for vacation rental hosts?
Airbnb's AirCover for Hosts provides up to $3 million in damage protection and $1 million in liability coverage, but it has significant limitations. It does not cover wear and tear, cash or securities, certain valuable items, or damage from pets in some cases. Claims can be difficult to process and are at Airbnb's discretion. Most industry experts recommend carrying dedicated STR insurance as primary coverage and treating OTA protection programs as supplementary, especially for properties listed on multiple platforms.
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