Does homeowners insurance cover Airbnb properties?

If you rent out your property through Airbnb, you'll need short-term rental coverage to cover your home and personal property during Airbnb stays.

Renting out property through Airbnb can be a profitable source of income and is a great way for interior decorator hobbyists to show off their design chops. But before opening up your humble abode for business, you’ll want to make sure that the property is correctly insured.

Airbnb offers an insurance option of their own — Host Protection Insurance — that provides up to $1 million in liability coverage if a guest files a lawsuit related to bodily injury or property damage. Airbnb terms and conditions also include a Host Guarantee which reimburses you up to $1 million if, for example, an unruly guest burns your house down during their stay. But for protection from acts of nature or break-ins and theft, you’ll need a more comprehensive policy.

A standard homeowners or condo insurance policy will protect the property if you’re using the home or condo as your primary residence. But if you’re renting out a home or a room in your primary home as an Airbnb property, you’ll need a modified or completely separate insurance policy that covers property and liability expenses in a place of business.

Key Takeaways

  • Airbnb Host Guarantee and Host Protection Insurance are included with every listing, but provide minimal protection

  • Standard homeowners insurance typically has limited coverage for homes or areas of your home being used for business

  • In order for your Airbnb property to be fully covered, you’ll need short-term rental coverage

What’s covered by Airbnb’s Host Guarantee and Host Protection Insurance?

Before deciding on more robust insurance for your Airbnb property, you should get a general grasp of what Airbnb’s built-in insurance already covers. These coverages, Airbnb Host Guarantee and Host Protection Insurance, cover hosts in the event of property damage or injury. However, there are a number of coverage exclusions to be aware of that you’ll want to supplement with a more well-rounded policy.

Host Guarantee

Airbnb’s Host Guarantee is included with every listed property at no extra cost. With Host Guarantee, you’re covered in the event a guest causes damage to or burglarizes your property or personal possessions during their stay. That means if a guest steals your iPad or causes a kitchen fire that damages your appliances, Airbnb will reimburse you for the loss.

There are a few things to be aware of, however, when considering if Host Guarantee is enough property coverage (hint: it isn’t).

  • You’re only reimbursed at the actual cash value (ACV) of your property or personal possessions that were damaged or stolen, meaning you’ll only get reimbursed for the depreciated value

  • Host Guarantee only covers damage caused by guests and won’t cover “acts of nature” like a bad storm or theft committed by non-guests

  • You need to submit your request for reimbursement within 14 days of the guest’s checkout or before your next guest checks in (whichever happens first)

  • There’s no coverage for valuable items like jewelry, artwork, collectibles, or money

Host Protection Insurance

Host Protection Insurance is also included in every Airbnb property listing, covering you in the event of a third-party claim of bodily injury or property damage during an Airbnb stay. According to Airbnb, Host Protection Insurance is “primary” insurance, meaning if a liability claim arises and it’s covered, Airbnb will handle the claim and you don’t have to use your personal insurance. With Host Protection Insurance, you’re covered up to $1 million in the following types of circumstances:

  • A guest slips and falls in your home, is injured, and files a lawsuit against you

  • A guest accidentally causes an injury to a third-party in a common area of an apartment or condo building

  • A guest is injured in a common area of an apartment or condo building and a lawsuit is brought against both you and the landlord (your liability would be covered with HPI, whereas the landlord’s building policy would cover his or her own legal expenses)

Keep in mind that Host Protection Insurance won’t cover you in certain circumstances. For example, if your guest intentionally injures someone in your building and you’re sued, you may not be covered. Airbnb also won’t cover any sort of property defect that injures your guests or damages their property, including bed bugs, mold, or any sort of pest damage or loss related to neglect.

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Does homeowners insurance cover your Airbnb?

In short, not really. A standard homeowners insurance policy generally won’t cover damage to a home or section of your home if the loss happens because of an Airbnb stay.

A standard homeowners or condo insurance policy will cover you against property and liability damage only if the home or condo is your primary residence or isn’t being utilized for commercial or business use. It may also cover acts of nature like catastrophic storm damage to the structure of the home that had nothing to do with the Airbnb stay itself.

Secondary or vacation home policies are underwritten to cover unique risks associated with infrequently lived-in properties. Vacation homes are generally at higher risk of break-ins and fire or water damage have a higher chance of going unnoticed or unreported.

However, for Airbnb, VRBO, and HomeAway properties, you’ll need what’s referred to as short-term rental coverage — in addition to your base policy — to be fully insured for losses that occur during a guest’s stay.

Short-term rental insurance: explained

As short-term rental or “home-sharing” services like Airbnb have become more common and property owners run the properties like legit hotels, insurance companies have developed insurance products to adapt to this evolving industry.

What type of coverage is available?

Some companies only require you to add on additional coverage, or an endorsement, to your standard homeowners insurance policy, while others have completely separate insurance policies specifically intended for frequent but temporary rentals.

Some established companies, like Liberty Mutual, Allstate, and American Family offer endorsements that you can simply add on to the properties’ home insurance.

Liberty Mutual, for example, explains that your base home insurance policy will cover you if you’ve rented out your home less than 32 days in the year. But if you rent it out more than 32 days, you’ll need Liberty Mutual HomeSharing Coverage endorsement to be covered.

Other companies, like Proper, cBiz, and Slice offer flexible, short-term insurance policies specifically geared toward short-term rental properties. Slice, for example, allows you to insure the property on demand for $7 a day.

What’s typically covered by short-term rental coverage?

You may be wondering if the combination of your base home insurance policy and Airbnb’s built-in coverage is enough protection for your Airbnb property. Do you really need additional short-term rental coverage? The answer is yes, absolutely.

For starters, Airbnb’s Host Guarantee isn’t insurance, it’s simply a slim set of circumstances where they may reimburse you in the event a guest damages or steals your stuff. Your homeowners insurance or vacation home insurance may protect you when the property is being used for personal use, but not for commercial or business use.

That’s where short-term rental coverage comes in. With this coverage, you’re typically covered in the following instances:

  • Coverage for loss of rent if a short-term rental is canceled because of a covered loss

  • Protection for damage to the property of others if it’s caused by you or your property

  • Theft losses if the theft occurred while renters were staying at your home

  • More comprehensive damage protection if a guest accidentally damages your personal property

Have any questions about coverage for your Airbnb? Talk to a licensed representative at Policygenius who can help you get the coverage you need for your Airbnb property.