As an Airbnb host, you want the best for your business, your family, your guests, and yourself. This can include making sure your rental has all the necessary amenities your guests might need and providing detailed guidance to the surrounding attractions and events so your guests have a wonderful experience. Home owners insurance for Airbnb hosts should also be at the top of this list.
Something many Airbnb hosts don’t put a lot of thought into is their insurance coverage for their business. Since Airbnb’s and other short-term rentals are a relatively new thing – and not the norm like hotels or residential rentals – insurance companies often don’t provide comprehensive coverage for these types of rentals. Most traditional homeowners insurance policies for rentals may not cover transient guests.
In the content that follows, I’m going to cover a wealth of information on Airbnb insurance and what my picks are for the best insurance for Airbnb hosts in 2023.
Why You Need Specialized Insurance for Your Airbnb
If you are like most Airbnb hosts and other short-term rental owners, you likely already have a homeowner’s insurance policy on your property. Unfortunately, as soon as you turn your home into an Airbnb rental, the business aspect instantly voids that homeowner’s policy.
So, the next logical step would be to obtain a landlord’s insurance policy, right?
Your guests aren’t actually considered tenants because they only inhabit your property in the short term, which makes a landlord policy a bad choice, too.
Maybe a commercial insurance policy then? Unfortunately, again, the answer is no. While commercial insurance policies do cover the business aspect of your Airbnb, they lack the liability and loss of income coverage you need for this type of business.
Getting the right insurance policy for your Airbnb can be tricky and a little frustrating, but ultimately you need a custom, specialized policy that includes coverage for everything. The policy should include aspects of homeowner’s, landlord, and commercial business insurance policies so anything that happens to you, your property, or your guests is covered.
Home Sharing Insurance
Not many people have heard of it, but you may come across home-sharing insurance in your search for Airbnb insurance. Home-sharing insurance provides coverage for short-term rentals while guests are staying in the property.
In general, home-sharing service insurance policies provide the liability coverage you need to cover property damage and injury. In some cases, a home-sharing policy might cover the host’s home and belongings as well.
These policies vary greatly from company to company, so you need to take your time and read through the fine print to ensure you understand exactly what you’re getting.
Things to Look for in an Airbnb Insurance Policy
Not all Airbnb insurance policies are created equal. There are several things you should consider when deciding on a policy, and I’ve outlined them below.
- Loss of income – Many hosts fail to consider this aspect, but don’t make this mistake. Should you fail to rent your property for one reason or another, the loss of income aspect will help you recoup the money you would have made had you rented the property.
- Property and Contents – When you rent your home out to strangers, you risk damage and/or theft. If you have property and contents insurance, should either of these things occur while your guests are renting your property, you’ll be able to get money to replace or repair your belongings.
- Liability – Don’t skimp on this coverage. Guest injury is one of the biggest risks a short-term rental host takes. You need an insurance policy with high coverage and few exclusions to ensure your guests (and yourself) are covered in the event someone gets hurt.
- Location-specific coverage – If you rent out an Airbnb in an area that’s prone to natural disasters, you will want to make sure your insurance policy includes location-specific coverage. Things like earthquakes, floods, and hurricanes can cause major damage, but this kind of coverage can help you rebuild in the event a natural disaster occurs.
- No-forced-entry coverage – In many cases, insurance companies require a property owner to prove forced entry in order to get paid for damaged or stolen property. In the case of an Airbnb, however, there is rarely any forced entry as guests are usually the cause of such damage or loss. Look for a policy that doesn’t require proof of forced entry to obtain payment should something like this happen.
Does my regular home owners insurance policy cover my Airbnb?
The short answer is that it depends! Each insurance company and individual policy can different depending on your location, extra add ons like flood insurance, and the type of residence.
Unlike your primary residence, there will be many people in and out of the property. You want to make sure the policy that you choose covers this type of activity. Just ask your insurance broker to lay it out for you before signing up for a policy!
To clarify with your insurance agent, make sure you specify the intended use of the property. You should disclose things like:
- Type of property: Primary residence, second home, short-term vacation rental, etc.
- Amenities at the property: Pool, hot tubs, trampoline, boat dock, etc.
- Intended business activity: Rent every night of the year, monthly rentals, long term tenancy only, home-share guests in your primary residence, etc.
- Personal property is included in the interior contents or not
The Best Insurance for Airbnb Hosts to Consider
The good news is that many insurance providers are realizing the popularity of these types of rentals and are jumping on the bandwagon. They are creating specialized policies for Airbnbs and other types of short-term rentals. Not all insurance companies are going to provide the comprehensive coverage you need as an Airbnb host, so I’ve listed several of my favorites.
All of the insurance companies below have good reputations and proven track records when it comes to providing the type of insurance coverage short-term rentals need.
Proper insurance has been around and catering to short-term rental owners since the beginning. They provide policies with all three aspects built-in: homeowners, landlord, and commercial coverage. The company is endorsed by VRBO and is the nation’s leading provider of short-term insurance coverage.
They tailor policies that are specific to vacation rental properties! I would recommend getting a quote from an insurance provider like Proper to estimate your insurance costs before starting an Airbnb business.
Allstate provides home-sharing insurance policies that cover theft and damage. This policy, HostAdvantage Home-Sharing Insurance, can be added to an existing homeowner’s insurance policy and is designed to “protect your place from the unexpected.”
As one of the nation’s largest insurers of rental properties, CBIZ offers policies specifically geared toward short-term rentals. Their policies include coverage for liability, property and contents, and loss of income.
Nationwide doesn’t actually have policies specific to Airbnbs, but they do have a variety of policies to choose from that will allow you to build comprehensive coverage for your short-term rental. Types of coverage include homeowner’s insurance, association insurance, personal liability insurance, and umbrella insurance. With all these options, you can create a policy that meets your vacation rental needs.
Again, not a provider that offers specific short-term rental insurance, but they do have add-ons that should provide sufficient coverage for short-term rentals. Farmers offers landlord and rental property insurance, with optional add-ons such as loss of rent, damage and theft, injury, and more.
American Modern is a great choice for Airbnb hosts because it offers custom-built policies that can be tailored to your specific needs. They have comprehensive coverage as well as flexible coverage, and there are additional options that allow you to pick and choose the coverage you need.
American Family Insurance
If you rent your vacation home for 62 days or less in a year, American Family Insurance might be the company for you. They offer policies that cover short-term rentals, but if your short-term rental sees more business than that, American Family recommends considering their landlord policy instead.
Erie Insurance is a one-stop-shop of sorts for all things insurance. For the Airbnb host, you’ll find options for premises liability coverage, libel and slander coverage, data breach liability coverage, income and property loss coverage, equipment breakdown coverage, worker’s compensation coverage, employment practices coverage, and business auto coverage.
Safely Insurance makes the list because it offers “vacation rental insurance redefined with the right coverage only when you need it.” They offer comprehensive guest screening with up to $1 million in coverage for your property, its contents, and bodily injury.
Hosts and their properties are protected immediately after signing up, and Safely boasts easy claims and fast payments. Because this insurance company specifically targets short term rental insurance, it’s a great options for your Airbnb rentals. They really know the industry so you’ll take comfort in knowing you’re fully covered.
Progressive offers coverage for vacation homes, vacant homes, and rentals. They also offer homeowner’s insurance policies and landlord policies – all of which can help you build a policy that works for your Airbnb.
What about Aircover?
Towards the end of 2022, Airbnb announced that it was releasing a new type of coverage for hosts called Aircover. To see all the details on what this covers for us hosts, check out this article on Airbnb. Aircover is essentially Airbnb’s host protection insurance and gives us an Airbnb host guarantee for certain liabilities.
Three million dollars of damage protection including reimbursements for deep cleaning, income loss, pet damage, and a bunch of other things.
One million dollars of liability insurance is also included. I love that Airbnb has added this to help us hosts but there are definitely things that your homeowners insurance policy for short term rentals will cover that Airbnb cover will not.
It’s not explicitly spelled out by Airbnb but you need to read between the lines and protect yourself. Most likely, you will need additional coverage on top of Aircover.
The good news is that Aircover applies for an Airbnb guest or host for any Airbnb stay booked on their platform.
How to get Airbnb home owners insurance
The best way to get options for home insurance for your short term rental is to use a broker. An insurance broker will shop many different companies and options for you to get the best rate and coverage.
If you use an insurance agent from one company, they will only give you premium amounts for their insurance coverage. There could be other options out there and you would never know!
That’s why you should get an agent that you can trust and have them shop around for you.
Recap of the best insurance for Airbnb or short term rental properties
As an Airbnb host, you cannot afford to leave your property, its contents, or your guests unprotected in the event something should happen. Not all insurance companies offer comprehensive short-term rental coverage. It’s up to you to make sure the policy you purchase is the right one for your Airbnb business.
When searching for an insurance policy, be sure to consider options for loss of income, liability, property and contents, location-specific coverage, and a no-forced-entry requirement for theft or damage.
No one likes to think the worst, but having a comprehensive insurance policy for your Airbnb will ensure you, your property, and your guests are completely protected in the event something bad happens.