Do I need special insurance for my Airbnb?

Do I need special insurance for my Airbnb? 

The short-term rental market is hot! As of 2022, there were 6.6 million Airbnb listings and 2 million VRBO listings across the globe. Homeowners everywhere are realizing how profitable and fun it can be to rent out their homes on Airbnb. 

If you’ve decided to take the leap into short-term rentals, you may be wondering if you need to purchase special insurance outside of your homeowners’ policy to protect yourself and your guests. In many cases, the answer is yes. 

Your homeowner’s policy probably doesn’t cover home-sharing 

Most homeowners’ insurance policies do not automatically cover incidents and claims related to home-sharing, aka, short-term rentals. In general, a homeowners’ insurance policy covers damage to your home from fire, storms, theft and vandalism … but only when the home is being used as a residence. When you use your property as an Airbnb or short-term rental, that property becomes a business, and it needs business insurance. 

Your home-sharing platform might include insurance 

Airbnb and HomeAway (VRBO) offer their owners short-term rental policies to protect their investments. These policies are capped at $1 million, so while they are helpful, they are often not enough to cover serious damage or injury. That’s why it’s important to purchase additional insurance for your short-term rental. 

Commercial property and liability insurance 

Some homeowners’ insurance carriers will allow you to purchase special policies or endorsements to cover your short-term rental. But if not, you’ll need to purchase separate business insurance. In addition to covering the same wind, storm, fire and theft risks a homeowners policy covers, commercial property insurance and commercial liability insurance for your Airbnb can also cover: 

• Damage to your property. If a guest damages your property, you can try to recoup the costs from them directly, but there are no guarantees … even if you file a lawsuit. Scuffed paint is one thing, but serious damage like a broken appliance, window, or HVAC unit can cost thousands. Commercial property insurance gives you peace of mind. 
• Theft of items from your Airbnb. Unfortunately, theft happens. If a guest decides they really, really like your TV or the painting above the fireplace, your commercial property insurance makes it easy to recoup your loss. 
• Damage to your guests’ belongings. If a guest’s vehicle or personal belongings are damaged while on your property, you can be held liable. Commercial property insurance protects you from having to pay out of pocket. 
• Injuries to a guest on your property. Damaged property is nothing compared to the eye-popping medical bills that can come after someone is injured on your property. Commercial liability insurance protects you from losing potentially millions of dollars in court.  

Some insurers offer special short-term rental policies 

As the market for short-term rentals grows, some insurers have begun to offer specialty short-term rental insurance policies that bundle together all the types of coverage an Airbnb property owner needs. We can help you wade through your options and find a policy that works for your short-term rental business. Just give us a call!