As an Airbnb host, you've invested countless hours and money into creating a space that guests love. Your property represents your passion and livelihood, from selected furnishings to thoughtful amenities. But what happens when a guest accidentally starts a kitchen fire? Or when someone slips by the pool and threatens legal action? While hosting offers rewards, it exposes you to unique risks that traditional insurance often doesn't cover.
Many hosts assume their homeowner's insurance and Airbnb's AirCover protection fully protect them. Unfortunately, this misconception leaves hosts vulnerable to devastating financial losses. Without proper short-term rental insurance, you're hosting with significant coverage gaps.
This guide explores the best Airbnb insurance options for hosts. It helps you understand what protection you need beyond the basics. We analyze top providers, explain critical coverages, and give you the information to make an informed decision about protecting your short-term rental business.
Why Your Standard Homeowner's Insurance Is Not Enough
If you're relying on your standard homeowner's insurance to protect your Airbnb, you might face an unpleasant surprise. Most traditional homeowner's policies contain a "business activity exclusion," which states that any damage or liability from commercial activities is not covered.
Insurance companies view short-term rentals as a business activity, especially if you're regularly hosting guests for profit. This classification means that if a guest damages your property or is injured during their stay, your insurance company could deny your claim, leaving you personally responsible for enormous costs.
Imagine a guest slips on your stairs, breaks their ankle, and sues you for $200,000 in medical bills and lost wages. You file a claim with your homeowner's insurance, but receive a denial letter stating your policy doesn't cover "business pursuits." Now you're personally on the hook for the entire amount.
This coverage gap poses a significant financial risk to your Airbnb income and personal assets. This necessitates exploring options like AirCover and dedicated short-term rental insurance for comprehensive protection.
Understanding Airbnb's AirCover: What It Is and Its Limitations
What AirCover Includes
Airbnb's AirCover program aims to provide hosts with baseline protection. It consists of two main components: Host Damage Protection and Host Liability Insurance.
Host Damage Protection covers damage to your property and belongings caused by guests. It offers up to $3 million in coverage for your home and its contents if damaged by guests, including certain valuables with specific limits.
Host Liability Insurance provides up to $1 million in liability coverage per occurrence. This protection activates when you are legally responsible for a guest's injury or property damage during their stay.
AirCover provides valuable protection and demonstrates Airbnb's commitment to host security. However, it's crucial to understand where this coverage ends.
Key Limitations and Gaps in AirCover
Despite its benefits, AirCover leaves several critical protection gaps:
Coverage Limits: While $1 million in liability and $3 million in property protection may sound substantial, these limits can quickly be exhausted in serious incidents or for high-value properties. Medical bills, legal fees, and property reconstruction costs can exceed these amounts.
Significant Exclusions: AirCover doesn't cover everything. Key exclusions include:
- Host’s intentional acts
- Property damage from wear and tear
- Damage from mold, fungi, or pests
- In some situations, there is limited or no coverage for shared common areas.
- Minimal protection for cash, pets, and vehicles
- Damage outside the booking period
Claims Process Complexities: Many hosts report frustration with the AirCover claims process, which requires extensive documentation and pursuing the guest for damages before Airbnb steps in.
Secondary Coverage Position: AirCover functions as secondary insurance, applying only after your primary insurance is exhausted or denied the claim.
No Loss of Income Coverage: If your property becomes uninhabitable due to guest damage, AirCover typically doesn't compensate for your lost booking revenue during repairs.
Not a Replacement for Homeowner's Insurance: AirCover is designed for guest-related incidents, not comprehensive property protection against natural disasters.
While AirCover provides a safety net, relying solely on it leaves hosts exposed to significant financial risks. This is why many professional hosts seek dedicated Airbnb host insurance to fill these protection gaps.
What to Look For: Key Coverages in Dedicated Short-Term Rental Insurance
Dedicated short-term rental insurance addresses the unique risks of temporary guest stays. Unlike standard homeowner's policies or AirCover's limited protection, these specialized policies provide comprehensive coverage tailored to hosting activities. Here's what to look for:
Liability Coverage
Liability Coverage protects you when guests or third parties suffer injuries or property damage related to your rental property. Dedicated policies offer higher limits from $1 million to $5 million or more, unlike AirCover's $1 million limit.
This protection includes:
- Bodily injury to guests or visitors
- Property damage claims from guests or neighbors
- Personal and advertising injury (like defamation claims)
- Medical payments for minor injuries regardless of fault
- Legal defense costs if you're sued
Higher liability limits are crucial for properties with attractive nuisances like swimming pools, hot tubs, or waterfront access, which increase injury risk.
Property Damage Coverage
Property Damage Coverage protects your rental property's physical structure. The best STR policies offer "special perils" or "all-risk" coverage, protecting against any loss cause not specifically excluded, which is much broader than "named perils" coverage that covers listed risks.
Look for policies offering Replacement Cost Value (RCV) instead of Actual Cash Value (ACV). RCV pays to replace damaged items at current market prices, while ACV deducts depreciation, leaving you with a financial gap when replacing older items.
Contents Coverage
This protection covers furniture, appliances, electronics, decorative items, and other personal property in your rental. Quality STR insurance covers damage and theft by guests, something standard policies and AirCover may limit or exclude once your property is used commercially.
Some policies allow scheduling high-value items (like artwork or electronics) to ensure they're fully covered beyond standard limits. This differs from AirCover's damage protection by offering broader loss causes and typically higher coverage limits.
Loss of Income / Business Interruption Coverage
Loss of Income Coverage (or business interruption insurance) reimburses you for lost rental revenue when your property can’t be rented due to a covered claim. This protection is crucial for hosts who rely on rental income to cover mortgage payments or other expenses.
If a guest causes a fire requiring three months of repairs, this coverage would replace your lost booking income during that period. This protection is not provided by AirCover.
Optional Coverages
Depending on your situation, consider these additional protections:
- Theft protection: Covers items stolen by guests or during break-ins
- Guest-caused damage coverage: May have different terms or lower deductibles than standard property damage.
- Bed bug remediation coverage: Pays for professional treatment of bed bug infestations (a potentially expensive and disruptive problem)
- Amenity liability: Additional protection for high-risk features like pools, hot tubs, exercise equipment, or bicycles provided to guests.
Policy Types: Endorsement vs. Standalone
When seeking STR insurance, you'll encounter two main approaches:
- Endorsements (or riders/add-ons) supplement your existing homeowner's or landlord policy with limited STR coverage. These are typically cheaper but offer narrower protection and have significant restrictions on the number of rental days allowed.
- Standalone policies are comprehensive insurance products for short-term rentals. These policies either replace your homeowner's insurance or work alongside it to provide complete protection for both personal and business use of the property.
Standalone policies offer the most comprehensive protection for active hosts, despite their higher cost. They eliminate coverage gaps and confusion about what is covered under which policy.
Top Airbnb Insurance Providers for Hosts: Comparison
The following providers are leaders in the short-term rental insurance market. These are popular options; always obtain personalized quotes based on your property, location, and hosting frequency.
Proper Insurance
Brief Overview: Proper Insurance is a leading specialized STR insurance provider, offering comprehensive coverage for vacation rental properties across all 50 states.
Key Coverages and Highlights:
- Commercial policy replacing your standard homeowner's insurance
- Liability coverage up to $2 million (higher limits available)
- Includes in one policy building, contents, and business income coverage.
- Covers short-term and long-term rentals
- No restrictions on rental days
- Covers amenities like pools and hot tubs.
- Includes standard bed bug coverage
Potential Pros:
- Comprehensive "all-in-one" solution
- Specialized in vacation rentals since 2014
- Underwritten by Lloyd's of London (AM Best "A" Rated)
- No occupancy restrictions
- 24/7 claims service
Potential Cons/Considerations:
- Usually pricier than homeowner's policy endorsements.
- Replaces existing homeowner's insurance
- Must meet property qualification standards.
Safely
Brief Overview: Safely offers a unique approach that combines specialized insurance with guest screening technology, creating an integrated risk management solution for hosts and property managers.
Key Coverages and Highlights:
- $1 million liability coverage per occurrence
- Property damage protection with varying limits based on plan
- Includes accidental and intentional guest damage.
- Amenity damage coverage (pools, hot tubs, etc.)
- Combined with guest verification and screening tools
- Instead of an annual premium, a per-night pricing model.
Potential Pros:
- Integrated guest screening and insurance solution
- Pay-per-night model can be cost-effective for occasional hosts.
- No long-term contracts
- Easy to implement with existing homeowner's insurance
- Streamlined claims process
Potential Cons/Considerations:
- Not a replacement for homeowner's insurance.
- Coverage may be more limited than comprehensive standalone policies.
- Availability varies by location.
- In some cases, better for active property managers than individual hosts.
CBIZ Vacation Rental Insurance
Overview: CBIZ offers specialized vacation rental insurance to protect the property and business aspects of short-term rentals.
Key Coverages and Highlights:
- Commercial package policy for vacation rental properties
- Liability coverage with $1 million to $2 million
- Property coverage on a replacement cost basis
- Loss of rental income coverage
- Coverage for guest theft
- Covers multiple booking platforms, not just Airbnb.
Potential Pros:
- Specialized in vacation rental risks
- Customizable for individual properties or multi-property portfolios
- Coverage for multiple booking platforms
- Included business income protection
Potential Cons/Considerations:
- Not available in all states
- May require bundling with other insurance products
- The application process can be detailed and time-consuming.
- Best for full-time rental properties vs. occasional rentals
Slice
Overview: Slice offers on-demand homeshare insurance that can be purchased only for the days when guests are staying at your property. This provides flexible coverage for part-time hosts.
Key Coverages and Highlights:
- On-demand coverage activated during guest stays
- $2 million in commercial liability coverage
- $100,000 in property protection
- Coverage for guest theft and vandalism
- No annual commitment required
- A digital-first approach with a streamlined process
Potential Pros:
- The pay-per-use model is ideal for occasional hosts.
- Easy digital application and management
- Can be activated only for specific dates.
- Works with existing homeowner's insurance
- No minimum stays required
Potential Cons/Considerations:
- Not available in all states
- Lower property coverage limits than some competitors
- Remember to activate coverage before each stay.
- Less comprehensive than year-round policies
- Not ideal for full-time rentals
How to Choose the Right Insurance Provider
Finding the best Airbnb insurance isn't a one-size-fits-all proposition. Your ideal coverage depends on your situation, property, and hosting frequency. Consider these crucial factors:
- Coverage Needs: Assess your property value, location risks, and income dependence. High-value homes or properties with amenities like pools require higher coverage limits. If you depend on rental income, prioritize business interruption coverage.
- Policy Type: Determine if an endorsement to your existing policy is sufficient or if you need a comprehensive standalone policy. Full-time hosts benefit from standalone policies, while occasional hosts find endorsements adequate.
- Cost vs. Value: Don't choose the cheapest option. Balance premium costs against coverage comprehensiveness and deductible levels. The lowest premium often comes with the highest deductible and most coverage exclusions.
- Provider Reputation & Claims Process: Research customer reviews and financial stability ratings (A.M. Best, Standard & Poor's). A company's claims handling reputation is crucial. The true test of insurance is how they respond when needed.
- Location & Property Specifics: Ensure the provider operates in your state and covers your property type. Coverage options and requirements vary for single-family homes versus condos, apartments, or unique properties.
- Read the Fine Print: Before purchasing, review policy documents, exclusions, conditions, and requirements. Pay attention to occupancy restrictions, guest screening requirements, and coverage limitations.
How Good Management Complements Insurance
Robust insurance is essential, and proactive property management reduces the likelihood of filing a claim. The best risk management strategy combines comprehensive insurance with preventative practices.
Implementing strong safety measures and management protocols significantly reduces your risk exposure. This includes thorough guest screening, clear house rules, regular property maintenance checks, prompt communication, and proper safety equipment installation (smoke detectors, fire extinguishers, pool safety features, etc.).
Navigating hosting complexities, including risk management and insurance needs, can be demanding. Partnering with an experienced property management partner like Checkmate Rentals can streamline operations and provide peace of mind. Checkmate's nationwide co-hosting model ensures owners retain control while benefiting from expert local teams, transparent pricing starting at 15%, and contract-free service, helping you manage risks alongside your insurance strategy.
Conclusion
Finding the best Airbnb insurance requires understanding that neither standard homeowner's insurance nor Airbnb's AirCover program alone provides sufficient protection for most hosts. The financial risks of hosting without proper coverage are too great to ignore.
Dedicated short-term rental insurance fills critical protection gaps, offering comprehensive coverage for your property and liability exposure. You can select the best policy to protect your investment by assessing your needs and comparing the leading providers in this guide.
With the right insurance and risk management strategies, you can host confidently, knowing you are prepared for challenges. Your Airbnb business deserves complete protection.
