home with wood cross beams and granite counter tops
Does My Home Insurance Policy Cover AirBnB/Short-Term Rentals?

Airbnb is one of the most popular short-term rental platforms, with over 500 million rooms rented since its creation in 2008. Two million people stay in Airbnb's every night around the world.

With the average short-term rental owner making over $900/month, it certainly has business appeal. While the benefits of making money on the side with your home are high, it's also essential to stay protected. If you're a homeowner, that means making sure you have the right insurance policy to protect you, your home, and your belongings.

Will My Regular Homeowners Insurance Policy Cover Me?

No. At least, not without a few adjustments first. Homeowners insurance policies are crafted with the notion that you are either buying a home and living in it or renting it out to someone long-term. Both these scenarios pose significantly less risk than renting your house out to multiple people.

Strangers pose unpredictable risks. They are unfamiliar with your home and more likely to experience injuries on your property, not realize when something is off, and unlikely to know how to mitigate the damage. They're also unpredictable. They may

  • light the place on fire
  • experiment with illegal substances
  • leave behind a live cat
  • conduct illegal business
  • use the bathroom, not in the bathroom

sticker what by Victoria Justice

They're not always trustworthy. While you may not typically steal from yourself, a tenant might become attached to some of your prized belongings and take them home as souvenirs of their stay.

With more risk, comes the need for more coverage and a different pricing model.

What Happens If I Don't Get a Short-Term Vacation Rental Insurance Policy?

That won't end well. The underwriting of your policy assumes how you will use your home. If you violate that intended use of your standard home insurance policy, then you risk having your full coverage voided. And if something happens (a fire, storm, etc.), you could be left paying for all the damages out of pocket.

Doesn't Airbnb Provide Insurance Coverage?

Yes. Airbnb has a policy it offers to protect hosts from damages and liability. However, it's not a homeowners insurance policy. So, you can't rely on it as one. If something happens to your home outside of that policy's coverage like home is vacant and a pipe bursts, flooding your living room, you'd be paying for the damages.

What Type of Homeowners Insurance Policy Do I Need?

You may need a different policy form depending on the frequency of which you rent your property:

  1. One-time rental: Ed Sheeran's coming to town. Hotels have no vacancies. Even hostels are at max occupancy. You decide you want to rent out a few spare bedrooms. Typically, all you need to do is contact your homeowners insurance provider and let them know. They often make one-time exceptions.
     
  2. Somewhat frequent rentals: If you only want to rent out your place when you go on vacation, then you can usually purchase an add-on for your policy that covers infrequent short-term vacation rental use of your property.
     
  3. Continuous home rental: If the Airbnb bug has bitten you, then you need to check if your current carrier offers a home-share endorsement or short-term rental endorsement. If not, you'll need to find a new carrier.
     

What Types of Homeowners Insurance Coverage Do I Need?

Whatever policy you purchase, you need to make sure it covers these three areas:

  • The Structural: Damage to your home by renters may not be widespread with short-term vacation rentals, but home damage still happens. Your policy needs to cover any damage to the structure of your home.
     
  • Liability: If someone slips and falls in your home and gets injured, they could sue you. You'll want to make sure you have plenty of liability insurance to cover you.
     
  • Your Belongings: You'll need to make sure your belongings remain protected in case someone breaks or steals them.

Which Homeowners Insurance Carriers Cover Short Term Rentals?

Short Term Rental Endorsement Offered
Liberty Mutual
Plymouth Rock
Allstate
Erie
Foremost
American Family
Olympus
Lloyds


Always Contact Your Homeowners Insurance Company About Changes

One of the most fundamental mistakes to make is not talking to your insurance provider. Your insurance company may have you purchase an add-on, recommend a different policy, or not cover your house at all if you decide to list on Airbnb or VRBO. However, with over 150 million people using Airbnb and over 660,000 listings in the US alone, many homeowners insurance companies understand that its popularity will only continue to increase. As a result, more and more insurance companies are offering a home-share endorsement or short-term rental endorsement.

At your service,
Young Alfred