Securing coverage for a rental property can feel daunting. Skift’s research shows that short-term rentals generate over $115 billion annually. Many homeowners listing their spaces on platforms like Airbnb or Vrbo assume that standard home insurance is enough. That assumption can lead to financial loss if something goes wrong. Short-term rental insurance protects temporary rentals. So, in detail, what is short-term rental insurance, and is it really needed for homeowners?

Read this complete post for in-depth clarification now!

 

What is Short-term Rental Insurance Exactly?

Short-term rental insurance provides property owners with specialized coverage when renting their homes for brief stays. However, standard home insurance may not cover rental-related incidents. This policy protects against property damage, liability claims, and loss of rental income. Besides, many short-term rental policies provide extra benefits.

For instance, they include coverage for vandalism, guest injuries, natural disasters, and legal expenses. A single accident, dispute, or unexpected event could incur significant out-of-pocket costs without this protection. Therefore, knowing what short-term rental insurance covers is essential.

Selecting the right policy ensures peace of mind, financial security, and a smoother hosting experience, especially in hyperlocal real estate markets where short-term rentals are in high demand.

💡Related – How to Find a Profitable Rental Property in Any Market

 

How Short-Term Rental Insurance Works

It provides coverage tailored to property owners renting their spaces for short stays. Standard home insurance may not cover rental-specific risks. This policy protects against guest-related damages, liability claims, and income loss. Since platforms like Airbnb and Vrbo (read our complete review here) offer limited protection, having a dedicated policy ensures that hosts are fully covered.

This insurance typically includes coverage for accidental damage, theft, and vandalism. Some policies even offer liability protection if a guest gets injured on the property. Specific plans compensate for lost rental income if a rental becomes uninhabitable due to a covered event like fire or flooding. This support helps owners stay financially stable.

Property owners must select a policy that fits their rental frequency and needs to activate coverage. Most insurers require details about the property, expected rental duration, and potential risks.

Once hosts secure the policy, they can confidently operate. They know it protects them against unexpected incidents.

 

How to Get Short-Term Rental Insurance

Researching providers specializing in temporary rental coverage. Since many exclude rentals, comparing options is essential. Many insurers offer customized plans based on rental frequency, location, and risks. This process can take a few days to a couple of weeks. Before choosing a policy, owners should assess coverage limits, exclusions, and protections like liability or income loss.

Once a policy is selected, the next step is to apply for property and rental details. Most insurers require guest capacity, rental duration, and security measures.

Approval times vary, with some policies activating in 24 hours while others take several days.

After approval, the policy takes effect, letting hosts rent confidently. It reviews coverage annually or before significant rental changes to ensure ongoing protection.

 

What Short-Term Rental Insurance Includes

They provide essential protections for property owners renting out their spaces. From liability coverage to compensation for lost income, these policies help safeguard against unexpected risks. With tailored coverage options, hosts can rent with confidence. They know they are financially protected.

Here’s a closer look at what it includes –

 

• Property Damage Protection – This covers repair costs if guests damage furniture, appliances, or the property, preventing out-of-pocket expenses.
• Liability Coverage – Protects against claims if a guest is injured, covering medical expenses and legal fees.
• Theft and Vandalism Coverage – Compensates owners for stolen or intentionally damaged items, safeguarding valuable belongings.
• Loss of Rental Income – Reimburses lost earnings if the property becomes uninhabitable due to a covered event.
• Legal Expense Protection – This covers legal fees if a guest files a lawsuit, ensuring financial support for disputes.

 

💁‍♀️ Also read – The True Cost of Renting vs Owning a Home

 

What Short-Term Rental Insurance Leaves Out

While short-term rental insurance provides valuable protection, it does not cover everything completely. Specific exclusions can often leave property owners responsible for unexpected repair costs. Therefore, knowing these coverage gaps allows hosts to plan for additional security, legal protection, and financial stability.

See here what it leaves out –

 

• Normal Wear and Tear – This covers sudden damage but not gradual deterioration from regular use.
• Intentional Host Damage – This does not cover damage caused deliberately by the property owner.
• Uncovered Income Loss – Only reimburses lost rent for covered events, not market downturns or vacancies.
• Pest Infestations – Excludes damage from termites, rodents, or bedbugs.
• Unauthorized Guest Actions – This may not cover damages from unapproved events or subleasing.
• High-Risk Natural Disasters – Earthquakes, floods, or hurricanes may need extra coverage.

 

 

Providers That Offer Short-Term Rental Insurance

Several insurers provide short-term rental coverage. For example, Allstate’s HostAdvantage includes a Merry Maids discount, while American Family covers rentals for up to 62 days per year. Similarly, American Modern insures rentals for up to three months, and CBIZ covers properties rented for up to six months annually.

If you need add-on coverage, Erie and Nationwide offer home-sharing endorsements for occasional rentals. Other providers offer flexible options. For instance, Foremost allows policy customization with landlord packages and endorsements. Vrbo-backed Proper Insurance covers short-term rentals, personal use, vacancies, and long-term tenants in one policy.

Meanwhile, USAA provides coverage for rentals up to 30 days. Hosts can find the best policy to protect their property by comparing these options.

 

How Much Does Rental Insurance Cost?

On average, policies range from $500 to $2,000 annually, depending on coverage limits and add-ons. For example, a basic policy covering liability and property damage may cost around $40 to $60 monthly. At the same time, more comprehensive plans, including loss of rental income and legal coverage, can exceed $150 per month. Besides, properties in high-risk areas, like hurricane-prone coasts, often have higher premiums.

Hosts can compare multiple providers to keep costs manageable and customize their policy based on specific needs. Many insurers offer discounts for security upgrades, such as installing surveillance cameras or smart locks. Some providers reduce premiums by 10% to 15% for homes with advanced security features. Furthermore, bundling short-term rental insurance with other policies can increase savings.

Property owners can secure the right coverage without overspending by knowing pricing factors and available discounts.

 

Comparing Home Insurance Options

Choosing the right home insurance policy requires comparing coverage, costs, and benefits. Since not all policies cover short-term rentals, property owners should evaluate providers based on their coverage for property damage, liability protection, and loss of rental income. Some insurers offer flexible policies tailored to short-term rental hosts, while others require additional endorsements. Costs vary depending on location, property size, and risk factors.

Look at a comparison of several providers offering short-term rental insurance –

 

Company	Coverage Type	Estimated Annual Cost
Proper Insurance	Comprehensive short-term rental coverage	$2,000 – $3,000
Allstate	Homeowner’s policy with rental endorsement	$1,740 – $2,820
State Farm	Landlord insurance with short-term rental endorsement	$1,740 – $2,820
Farmers Insurance	Homeowner’s policy with short-term rental endorsement	$1,740 – $2,820

Note – The estimated annual costs are approximate and can vary based on specific property details and coverage options.​

Property owners can find the best policy by comparing these options. It helps balance coverage and affordability. Selecting the right insurer provides financial protection. 

 

Other Ways to Safeguard Your Short-Term Rental

It offers the best protection, but alternatives exist. For instance, landlord insurance works for long-term rentals, requiring a lease and extended stays. As a result, many insurers won’t cover short-term rentals under these policies. Therefore, a policy designed for short-term stays is the better choice for properties rented to different guests regularly.

Another option is bundling home and rental insurance into a single policy. In addition, some providers offer endorsements that extend homeowner’s insurance to cover short-term rentals. It not only simplifies the process but also helps reduce costs.

The platform automatically includes AirCover for Airbnb hosts, which provides $1 million in host liability insurance and $3 million in damage protection. However, this coverage has exclusions, including environmental damage and loss of income due to guest-related incidents.

Likewise, Vrbo offers $1 million in liability coverage, which only applies to third-party claims and does not cover damage to the rental itself. Because platform-based protections have limitations, property owners should consider supplemental insurance to ensure complete coverage.

These alternatives help rental hosts protect their property and finances.

Recommended read – 20 Essential Amazon Gadgets for Luxury Homeowners

 

Should You Get Short-Term Rental Insurance?

The right insurance is crucial if you rent your property for short stays. Standard homeowner’s policies often exclude rental-related risks, leaving you exposed. For example, if a guest damages your home or gets injured, your regular policy may not cover it.

Therefore, short-term rental insurance ensures financial security against property damage, liability claims, and income loss. Further, this insurance covers unexpected issues like theft, vandalism, or legal disputes. Some policies even reimburse lost rental income if your property becomes uninhabitable.

Since short-term rentals carry unique risks, specialized coverage prevents costly out-of-pocket expenses.

 

Frequently Asked Questions (FAQ)

 

1. Does short-term rental insurance cover multiple properties?

Yes, some insurers offer policies that cover multiple rental properties under one plan. However, coverage limits and pricing vary based on location, occupancy, and risk factors.

 

2. Will your premium increase if you file a claim?

Yes, just like other types of insurance, frequent claims can lead to higher premiums. Some insurers offer no-claims discounts, rewarding hosts who maintain a claim-free history.

 

3. Can you insure your short-term rental if it’s in a condo or apartment building?

Yes, but coverage may depend on building policies and HOA regulations. Some condo associations require owners to have separate liability insurance, while others prohibit short-term rentals altogether.

 

4. Under your policy, are swimming pools, hot tubs, or trampolines covered?

Many insurers consider pools, hot tubs, and trampolines high-risk and may exclude them from coverage. Some policies offer optional liability add-ons, so checking the terms before renting out a home with these amenities is essential.

 

5. Does short-term rental insurance cover identity theft or fraud?

Most policies do not cover financial fraud, such as guests using stolen credit cards to book stays. Hosts should rely on rental platforms’ verification systems or require security deposits for added protection.

 

Bottom Line

Short-term rental insurance is vital for property owners renting their spaces to guests. It provides financial protection against property damage, liability claims, and rental income loss. Platforms like Airbnb and Vrbo offer some coverage. However, they may not fully protect hosts from all risks. Investing in short-term rental insurance ensures peace of mind and financial security. It allows property owners to operate their rentals confidently.

Taking preventive measures ensures a safe and successful rental experience.

 

Protect Your Rental and Secure Your Income

Short-term rental insurance is essential for property owners hosting guests. It safeguards against property damage, liability claims, and rental income loss, ensuring financial security.

We help you –

• Get the right short-term rental insurance.
• Identify coverage gaps and stay fully protected.
• Avoid financial risks with expert solutions.
• Rent with confidence using the best policies.
• Simplify the process with expert insights.
• Get relocation support for relocating anywhere.

 

The right insurance strategy keeps your rental business safe and thriving.

We provide guidance and relocation support for making wise decisions. 🏡 Take the next step to book a session with us now!

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