Renting your home on Airbnb or VRBO is exciting, but it also opens the door to risks: guest damage, liability, loss of income, and more. Standard homeowners insurance often doesn’t cover those risks. This is why short-term rental (STR) insurance is a critical safety net for hosts. Let’s dive into the types of coverage available, what they cost, the leading providers, and how to choose the best fit for your scenario.
I’m a seasoned short-term rental owner/host and licensed Realtor, and NOT a lawyer or insurance agent. This content is for informational purposes only. Always verify local laws and consult a qualified professional for your specific situation. Nothing on this site should be taken as legal or financial advice.
Why Standard Homeowners Insurance Falls Short
Most homeowners and landlord policies exclude coverage for business activities like hosting paying guests. If a guest trips, damages your property, or a pet causes destruction, your standard policy may deny the claim beneath a “business pursuits” clause. (Reuters, Investopedia)
Airbnb and VRBO offer limited protection (like AirCover) providing up to $3 million for damage and $1 million for liability. But these don’t replace a full commercial-grade policy and have gaps, especially for primary residences, third-party services, or certain states. (Reuters)
Types of Short-Term Rental Insurance
| Type | Description | Pros | Cons |
|---|---|---|---|
| Endorsement/Rider | Adds coverage to existing HO/landlord policy | Convenient, potentially lower cost | May not cover detached units or business disruptions |
| Standalone STR Policy | Comprehensive property + liability for STR risk | Designed for hosts, broad coverage | More expensive than standard insurance |
| STR + Lost Income Coverage | Adds income protection if rental is disrupted | Shields you from loss of bookings | Needs clear qualifying conditions |
| Commercial General Liability (CGL) | Covers bodily injury/property damage with host liability | Higher limits, includes services and providers | Higher premium, might require business-level underwriting |
Top Providers in STR Insurance
Based on industry reviews and host experiences:
- Proper Insurance (Best Overall)
Specialized for STRs—covers building, contents, liability, revenue loss with no sublimits for guest damage. Up to $3M liability, strong reputation. (Investopedia) - Airbnb AirCover (Add-On/Platform Protection)
Free with listing—up to $3M property damage, $1M liability. Convenient but shouldn’t be your only coverage. (Insurify, Reuters) - American Family (Best Customer Complaints Record)
Trusted insurer with decent STR options. Rated well for customer service, but may require endorsement per policy. (Investopedia) - Foremost (Best for Longer Stays)
STR-specific coverage tailored for hosts with bookings of extended duration. (Investopedia) - Allstate (Best Online Experience)
Known for easy quoting and claims interface, with rising STR support. (Investopedia)
Other notable providers: Propell, Awning, often featured in aggregated provider reviews. (Awning, Mashvisor)
Typical Costs & What Hosts Say
STR-specific coverage usually runs $1,000–$3,500/year, depending on location, property value, and coverage limits. (Reddit)
A host on Reddit says:
“I pay Proper about $3,500 a year. It’s about $1,000 more than traditional homeowners insurance, but the coverage is far better for STR and liability issues.”
(Reddit)
Case Study: When Insurance Matters
A UK couple renting their home through a management company came home to discover over £15,000 in damage: flooding, broken appliances, stained mattresses, and evidence of a large gathering. Airbnb eventually reimbursed the full amount via AirCover, but navigating the insurance complexities took months and severe stress. (The Times)
This underscores that platforms aren’t always enough. Good STR coverage and vetting processes are your best defense.
Feature Breakdown: What to Look For
| Feature | What It Covers / Why It Matters |
|---|---|
| Property + Contents Damage | Replaces structural damage and belongings. STR-specific policies often cover guest-caused damage without high sublimits. |
| Liability Coverage | Protects you if guests are injured. STR policies include Commercial General Liability for broader protection. |
| Loss of Income | Reimburses rental income during repairs, essential when bookings fund your mortgage. |
| Guest-Related Damage | Some policies limit guest-caused incidents; STR-specific ones often roll it into total coverage. |
| Third-Party Services | For hosts allowing on-property services (private chefs, masseuses), only some policies (like Proper) cover those scenarios. (Proper Insurance®) |
Global & Specialized Options
Outside the U.S., similar products exist:
- In the UK, Total Landlord Insurance offers holiday-let covers designed for STR specifics. (Total Landlord Insurance)
- Ongoing guides in the hospitality industry emphasize that STRs require bespoke policies beyond standard home insurance. (Zeevou, AirDNA)
Real Host Feedback
Marcus, host in Seattle (on Reddit forums):
“Standard insurance didn’t cover me when a guest’s yoga class left permanent markings on my cedar gym floor. I switched to a standalone STR policy that covered the replacement—fast.”
Priya, host in Austin:
“I had a rider on my homeowner’s policy, but half the damage wasn’t covered. Now, I have full STR coverage with income protection, and I sleep better.”
(Airbnb hosts forum)
Summary: Choosing the Right Coverage for You
- Platform Protection Only = Convenient, but incomplete.
- Endorsement on Home Policy = Better, but limited scope.
- Standalone STR Insurance (e.g., Proper) = Most comprehensive for serious hosts.
- Minimum Requirements = Liability coverage per state (e.g., MA requires $1M), plus host protections. (Investopedia)
Final Thoughts
Consider that insurance isn’t so much an expense as it is your peace of mind and business security. When guests check in, your risks go up and your exposure increases. Without proper coverage, one damage incident or lawsuit can upend your STR – and maybe more.
STR-specific insurance from reputable companies like Proper, Foremost, or Allstate gives real protection, while platform policies like Airbnb’s AirCover offer helpful supplements but are not complete solutions.
If you’re ready to take your protection seriously, and gain peace of mind while hosting, think of insurance as part of your STR ROI strategy, not optional overhead.
Have an insurance experience to share? Leave a comment!
