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How does Airbnb home insurance work?

Home-sharing has changed the way that people travel while allowing property owners to earn extra income. However, many prospective hosts aren’t aware of how home-sharing can impact their homeowners insurance

For homeowners considering renting their property via Airbnb, it’s crucial that you know whether or not your homeowners insurance provides the proper coverage, as short-term rentals most often require additional endorsements or a new type of coverage altogether. Below, you’ll find out how a typical homeowners policy handles home sharing, as well as some short-term rental insurance options that can help ensure that you are properly covered. 

key takeaways
Key takeaways
  • Short-term rentals like Airbnbs require additional coverage to protect your belongings
  • Airbnb offers its own type of insurance, but there are gaps in coverage that lead hosts to other options
  • Some insurers offer home-sharing insurance options as an endorsement

Does standard homeowners insurance cover Airbnb properties?

Homeowners insurance coverage was developed to offer protection in the event of perils (causes of loss) such as fire, lightning, and wind. Things quickly get murky when you operate a business from your home — and insurers typically consider home-sharing a business activity.  

Most homeowners insurance policies offer protection for the occasional rental, as long as you inform the company beforehand. If you rent out your property on a regular basis, a standard homeowners policy isn’t likely to provide adequate coverage. Home insurance policies often exclude liability coverage — including bodily injury and property damage — for any business activity run from the home. If you are relying solely on your homeowners policy for protection, you may be at risk of being underinsured.

 

The risks of home-sharingHome_01 copyFreeform_Icons_trp.png

Opening your home to strangers comes with some risks. Vandalism, theft, and accidental property damage are serious concerns that any host should be aware of. Should a guest damage your belongings or incur bodily injury while staying on your property, you could be exposed to risk if you don't carry the correct insurance.

Landlords may be liable for the actions of tenants renting out their apartments. If a guest is injured, the landlord — as the owner of the property — could be held liable. This is one reason that many leasing agreements explicitly prohibit home-sharing.


What is home-sharing insurance?

Home-sharing insurance refers to the portion of insurance coverage necessary to protect your home as you operate an Airbnb. Regular home-sharing is considered to be a business activity, rendering your standard homeowners policy nullified as it does not protect business activity on your property. 

A standard home insurance policy provides liability coverage and property damage, typically extending to the property's guests and their belongings. Once you begin operating your home as an Airbnb, this coverage suite may leave gaps.

In some cases, insurance companies offer protection for Airbnb hosts with tenants who stay only occasionally. Bear in mind, however, the major differences between a one-off rental situation and the operation of a dedicated Airbnb business. To carry coverage in the latter case, you will need a home-sharing endorsement or a separate commercial insurance policy.

Regular home-sharing is considered to be a business activity, and since standard homeowners policies do not cover this, you must add on an endorsement.

An Airbnb insurance endorsement may be available through your current insurance company. These cover theft and property damage. Certain endorsements may cover liability, theft, vandalism, as well as damage to guests' property.

However, if property rentals comprise a significant portion of your income, you may need to purchase a separate insurance policy. In many cases, a landlord policy may suffice. Landlord insurance covers the primary dwelling, other structures on the property, personal property inside the dwelling, lost rental income, and any liability claims filed against you.

Zebra tip: Consider specialized home-sharing insurance policies


Companies like Proper Insurance sell insurance products specifically tailored to Airbnb and the home-sharing industry. This is often known as short-term rental insurance. These policies cover issues such as accidental damage to property, infestations, and mold. They also increase your personal liability coverage substantially, even covering legal fees in the event claims are made against you.


Does Airbnb offer insurance?

Some home-sharing companies offer a form of coverage for hosts. For instance, Airbnb offers protection through their own program called AirCover,1 which is free for hosts and automatically included. AirCover is the name of the overall protection plan and comprises three programs: Host Damage Protection,2 Host Liability insurance,3 and Experience Liability Insurance.

The majority of hosts on the Airbnb platform rent out their homes for standard lodging purposes. Airbnb Experiences4 differ in that they include in-person activities hosted by local experts, often offering activities like cooking classes, nature-based experiences and exercise. Because such experiences pose a unique level of risk, hosts who participate are covered by the Experience Liability insurance section of AirCover. 

For everyone else, the other sections of AirCover protect you and your property. Let's take a deeper look at Host Damage Protection and Host Liability Insurance. 

 

host damage
Host damage protection: Provides up to $1 million in property damage coverage.
  • What is covered: Damage cause by guests, unexpected cleaning costs due to the behavior of a guest, income lost if you are forced to cancel a booking due to damage caused by a guest. 
  • What’s not covered: Damage from wear and tear, loss due to acts of nature, injury or property damage to guests
host liability
Host liability protection: Provides up to $1 million in coverage for guests’ property damage or bodily injury.
  • What is covered: Bodily injury to a guest, damage or theft of guest property, damage caused by a guest in common areas.
  • What is not covered: Intentional damage, damage to your personal property. 

It’s important to be aware of the gaps in Airbnb's insurance coverage. Airbnb Host Protection Insurance does not cover loss of income, intentional acts, or mold. It is not intended as a replacement for homeowners insurance, and should instead be treated as supplementary protection to your primary coverage. Also, be aware that the claims process can be tedious, as claims go through Airbnb directly and are not handled by your own insurance company.

 

Insurance for VRBO, HomeAway, FlipKey, onefinestay, and others

Sites like VRBO, Homeaway, FlipKey, and onefinestay offer guidance on recommended insurance coverage for hosts. VRBO suggests using a vacation rental policy. The company worked to help design the coverage to suit the needs of its users. It is designed to cover homes that rotate between being rented out, being owner-occupied, and sitting empty for long periods. VRBO insurance is offered via Proper Insurance.

HomeAway offers $1 million in liability coverage for its users, while onefinestay has a policy underwritten by a syndicate of Lloyd’s of London, though the details on the coverage are vague. FlipKey suggests finding an insurance company that offers home-sharing coverage.

Research exactly what is covered by your home-sharing network and how it works with your current homeowners insurance. This can help you avoid gaps in coverage.

Zebra tip

Why you still need insurance even with Airbnb’s damage policy

While the damage policy serves as one layer of protection, you still need the proper insurance policy to fill in the gaps. Airbnb’s security deposits and Host Damage Protection plans offer coverage for damages made by the behavior of a guest, but damages caused by other perils will not be covered. This is where your home-sharing insurance policy kicks in. Airbnb recommends thinking of supplemental insurance as a must, rather than a “nice-to-have.”5

Learn more about Airbnb statistics. 


Does renters insurance cover Airbnb and home-sharing networks?

If you rent your home, it may still be possible to advertise it on a home-sharing site as a rental. The first thing you’ll need to do, however, is to check with your landlord to verify that this is allowed. Many leases explicitly prohibit such activity, so it always pays to check. Some renters forgo getting permission from their landlord, which can lead to trouble if an insurance claim is necessary, potentially resulting in eviction.

After receiving your landlord's consent, the next step is to consult your renters insurance policy to check for any restrictions. Some insurers may not allow you to rent out your apartment for longer than a certain duration, while others might restrict how much money you're allowed to make via home rentals each year. Some renters insurance companies may not offer Airbnb coverage at all.

As with homeowners insurance, it’s always wise to check with your renters insurance company to explore your options.


How to get Airbnb insuranceQuestion Mark

Not every insurance company looks kindly on home-sharing. The sharing economy has forced insurance companies to change how they provide coverage. As with ride-sharing, some insurers have responded with special short-term rental insurance options for home-sharing. Along with the limited liability insurance policy offered by most home-sharing companies, other insurance carriers offer options, including: 

  • Allstate HostAdvantage6: This program from Allstate protects against theft and damage to personal property up to $10,000 per rental period. 
  • Erie Homeshare7: Erie’s product offers coverage for property damage, theft and liability claims, and is only available for the insured’s primary residence. 
  • Proper Insurance8: This home-sharing policy operates a bit differently than others in that these plans are written as business policies that are meant to replace your existing plan. Proper takes components of commercial, personal, tenant and unoccupied policies to create a custom coverage suite for hosts.

 

Insurance for Airbnb guests

In most cases, your homeowners or renters insurance policy will provide you a fair amount of protection while you're traveling. Your personal belongings are covered against most losses, including theft or fire. Your personal property coverage for belongings outside your residence is 10% of coverage C (your total personal property amount) or up to $1,000, whichever is greater. This is subject to a deductible. This may be limited to theft alone on certain policies, so you'll need to check with your insurance company. Travel insurance is also a great option to consider while staying in an Airbnb or similar short-term rental.

Zebra tip: Always inform your insurance company of home-sharing


One of the most important things you can do before becoming a host is to inform your insurance company. The company can then help you determine what’s covered by your current homeowners policy, as well as whether you’ll need an Airbnb endorsement or altogether different coverage. Without informing your provider, you risk having gaps in your coverage or potentially violating the terms of your policy if your insurer does not allow vacation rentals.


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Airbnb laws by city

Short-term rentals have had a major impact on the cities in which they are popular. Some cities have adopted relatively lax approaches to home-sharing regulation, while others — like New York City — require rental hosts to follow the letter of the law to a T.  

Below are examples of Airbnb regulations in some major cities. This list is by no means exhaustive but provides a general idea of the differences short-term rental hosts may face from city to city. 

Los Angeles Airbnb laws
Los Angeles Airbnb laws

LA requires short-term rentals to be registered with the city, and only operate for up to 120 days a year. Rent your unit for longer than that, and you’ll need to apply for an extended-stay registration.9

New York City Airbnb regulations
New York City Airbnb regulations

New York was one of the first cities to restrict Airbnb and other short-term rental companies. New York City's individual laws and zoning restrictions are too numerous to list, but more information can be found on the city’s website.10 Airbnb also has a helpful guide to New York City regulations.11

San Francisco Airbnb rules
San Francisco Airbnb rules

San Francisco Airbnb hosts must register rental properties with the city and obtain a certificate from the Office of Short-term Rentals. To remain eligible, you must live at the property in question for at least 275 days per year.12

Denver Airbnb regulations
Denver Airbnb regulations

The city of DenverColorado, requires hosts to obtain one of two different licenses in order to legally rent out their property. For stays in your primary residence shorter than 30 days, you’ll need a Short-Term Rental Business license. For larger spaces dedicated to rentals, you’ll likely need a Lodging Facility business license.13

portland
Portland Airbnb rules

Portland’s regulations require hosts to get a safety inspection, pay a permit fee, comply with rental or HOA agreements, and limit the number of months a person can rent their entire home or apartments.14

Washington DC Airbnb restrictions
Washington DC Airbnb restrictions

In Washington D.C., hosts must obtain certain licenses and are restricted in how long tenants can rent out an apartment or house each year. By law, any D.C. homeowner who wants to rent their place on Airbnb or any other platform has to get a short-term rental license from DCRA. If the owner is present in the home during the rental, they can host short-term renters for any length of time over the course of each year; if they are not present, those rentals are limited to a combined 90 days each year.15


Airbnb insurance considerations

The rise of home-sharing services threw the insurance industry a curveball. Insurers are still adapting, meaning that short-term rental insurance is continually evolving. For this reason, one of the most important things you can do before becoming a host is to inform your insurance company. The company can then help you determine what’s covered by your current homeowners policy, as well as whether or not you’ll need an Airbnb endorsement or altogether different coverage. 

 

Airbnb insurance FAQs

Do Airbnb hosts need extra insurance? Chevron down icon

While Airbnb does offer its own form of coverage, they recommend that hosts carry additional coverage in the form of an endorsement or commercial policy.

Do you need commercial insurance for Airbnb? Chevron down icon

It's important to first speak yto your insurance provider about what types of endorsements they offer for Airbnb hosting, but often hosts will be required to hold a commercial policy or business use endorsement to properly and safely operate their home as an Airbnb.

How do I get Airbnb insurance? Chevron down icon

Speak to your insurance agent about the home-sharing coverage options your provider offers. You can also purchase a separate policy from another carrier with a home-sharing coverage option, like Slice or Proper insurance.

What is Airbnb's damage policy? Chevron down icon

If your guest breaks or damages an item beyond repair, the first thing you should do is confirm whether or not you charged them a security deposit. If you did, you can make a request to collect the deposit through Airbnb and the money will be taken from the security deposit funds. If you didn’t charge a security deposit and/or the guest refuses to pay, you can still request compensation through Airbnb’s Host Damage protection plan.



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Ross Martin
Ross MartinManager, Content Quality

As a licensed insurance agent, Ross researches and writes insurance content intended to help users make informed decisions.

Ross's background is in writing and education. He holds a master's degree from Royal Holloway, University of London.

Ross's work has been cited by The New York Times, Investopedia, The Simple DollarThe BalanceCar and Driver and Fox Business. He has been quoted by CNET, I Drive Safely and Kin Insurance

About The Zebra

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