Short-Term Rental Insurance for Renting Out Your Home
Key Takeaways
- Short-term rental insurance (or homeshare insurance) covers your home if you rent it out for a week or less on average, such as through Airbnb or Vrbo.
- Short-term rental insurance gives coverage that a homeowners policy usually doesn’t.
- Proper, Allstate and CBIZ provide the best homeshare insurance offerings.
What is short-term rental insurance?
Also referred to as “homeshare insurance,” short-term rental insurance protects your home from property damage and liability if you have renting guests staying at your home temporarily.
The IRS defines a short-term rental property as one where the renters stay for an average of seven days or less.
Do I need short-term rental insurance?
If you’re using your home as a homeshare, your standard home insurance policy probably won’t cover damage or liability. In fact, your insurance company might cancel your policy if it discovers you’re renting out your home.
Since most companies consider renting out your home short-term to be a business — which is excluded in standard home insurance coverage — you’ll want to get short-term rental insurance.
On the other hand, if you’re the one renting a short-term property from someone else, you don’t need a short-term rental policy. In this case, if you’re worried about damaged or stolen personal property or liability, you can cover yourself with a regular renters insurance policy.
What does short-term rental insurance cover?
Short-term rental insurance usually covers:
- Guest liability, which pays for medical and legal expenses from a guest getting injured in your home during their stay.
- Property insurance, which provides coverage for your home and belongings if a guest damages them.
- Theft, which pays out if a guest steals your belongings, or if there’s a break-in during that time.
Depending on which short-term rental insurance company you use, coverage can also include:
- Compensation for lost income
- Excessive guest utility usage
- Expenses arising from identity theft
- Injury or property damage arising from serving alcohol
What short-term rental insurance DOESN’T cover
Be aware that most short-term rental insurance policies don’t cover the following risks:
- Valuables coverage: If a guest damages or steals expensive items like jewelry or art, it might not be covered up to the items’ full value.
- Guest personal property: Your guest’s belongings won’t be covered against damage or theft. Instead, they would need to file a claim with their own home or renters insurance company for compensation.
- Wear and tear: Damage to your home due to poor home maintenance isn’t covered by short-term rental insurance.
- Flood and earthquake: Damage due to these natural disasters need to be covered by a flood insurance or earthquake insurance policy in order for you to get compensation.
If you’re using a homeshare platform like Airbnb or Vrbo to rent your home out, it may have its own exclusions. Make sure you know exactly what coverage your platform provides.
How do I get short-term rental insurance?
If you currently have a homeowners insurance policy, check with your insurance company to see if they also have short-term rental insurance as an add-on policy.
If not, you can purchase it as a secondary policy elsewhere, or even switch insurance companies to one that offers it. Be sure to compare home insurance quotes so that you get the best deal you can.
What are the best short-term rental insurance companies?
Our choices for the best short-term rental insurance are Proper, Allstate and CBIZ.
Proper: Best overall
Maryland-based Proper specializes in providing short-term rental insurance in all 50 states.
Their coverage package includes:
- $1 million liability coverage, with the option to purchase an additional $1 million
- Replacement cost coverage for dwelling and personal property
- No limit on damage caused by guest, theft or vandalism
- Liquor and pet liability coverage
- Loss of revenue coverage with no time limit
Proper also provides add-on protection from bed bug or flea damage and liability, meaning it can protect you from financial loss if a guest is bitten by fleas or bedbugs in your home, or if the pests decide to go home with your guests. It also helps with extermination and loss of income.
Allstate: Best homeshare add-on coverage
Allstate’s HostAdvantage coverage supplements your home insurance when you use your house as a homeshare.
HostAdvantage includes coverage for:
- Damage: If a guest damages your personal property during a stay, HostAdvantage pays up to $10,000 per stay to cover what your regular home insurance policy doesn’t.
- Theft: HostAdvantage helps pay for replacement of your personal property stolen by a guest during their stay.
Combined with Allstate’s comprehensive standard home insurance coverage and its easy online and smartphone claim filing, this policy is an excellent option.
CBIZ: Best for vacation rental homes
CBIZ offers a single policy that combines homeowners, landlord and homeshare insurance into one.
Its coverage includes:
- $2 million limit payout in a policy period
- $1 million limit payout per incident
- $1 million limit payout for personal injury and “advertising injury” (damage from slander, loss of privacy or other similar risks)
- $5,000 for medical payments
- Replacement cost coverage for dwelling and contents
- Sewer and drain backup
- Loss of rental income