Short-term rentals have created a new category of insurance problem. Millions of homeowners are renting their properties on Airbnb, VRBO, and similar platforms — and most of them have no idea that their homeowners insurance does not cover it.
Here is what you actually need as a short-term rental host.
Why Your Homeowners Policy Does Not Cover Short-Term Rentals
Standard homeowners insurance is designed for owner-occupied properties. The moment you rent your home to paying guests — even for a single weekend — most homeowners policies either exclude coverage or significantly limit it.
The reason: short-term rental guests are strangers. They have no long-term stake in your property. The liability exposure is different from having friends stay over. And the frequency of use is higher than a typical owner-occupied home.
Most homeowners policies have language excluding "business pursuits" from coverage. Renting your home for income is a business pursuit. If a guest is injured, if they damage your property, or if a fire starts during their stay, your homeowners insurer may deny the claim entirely.
What About Airbnb AirCover?
Airbnb offers a program called AirCover for Hosts, which provides some protection for property damage and liability. It is better than nothing — but it is not a real insurance policy, and it has significant limitations:
- It is not regulated as insurance and does not carry the same consumer protections
- Coverage is subject to Airbnb's internal claims process, not an independent insurer
- It excludes many common scenarios (cash and securities, vehicles, shared or common areas)
- Liability limits may be insufficient for serious injuries
- It does not cover loss of rental income
VRBO and other platforms have similar programs with similar limitations. Do not rely on platform protection programs as your primary coverage.
What Short-Term Rental Hosts Actually Need
Short-term rental insurance (also called vacation rental insurance or home-sharing insurance) is specifically designed for properties rented to guests on a short-term basis. It bridges the gap between homeowners insurance and traditional landlord insurance.
Key coverages include:
Property damage. Covers damage to the structure and your personal property caused by guests — accidental damage, vandalism, theft.
Liability. Covers you if a guest is injured on the property and sues. This is the most important coverage for short-term rental hosts. A guest who breaks their leg on your stairs can generate a six-figure lawsuit.
Loss of rental income. If a covered loss makes the property uninhabitable, loss of income coverage pays the rental revenue you lose during the repair period.
Bed bug and pest coverage. Some short-term rental policies include coverage for pest infestations — a real risk when you have frequent guest turnover.
Options for Short-Term Rental Coverage
Endorsement to your homeowners policy. Some carriers offer a home-sharing endorsement that extends your homeowners policy to cover short-term rental activity. This is the simplest solution if your carrier offers it, but coverage limits may be lower than a standalone policy.
Standalone short-term rental policy. Purpose-built policies from carriers like Proper Insurance, Slice, and others are designed specifically for vacation rentals. They typically offer broader coverage and higher limits than endorsements.
Commercial landlord policy. If you rent the property frequently enough that it functions more like a business than an occasional rental, a commercial landlord policy may be appropriate.
The Occupancy Question
How often you rent matters for coverage. A property rented 10 nights a year is a different risk than one rented 200 nights a year. Some carriers draw a line at a certain number of rental days per year — above that threshold, you need a different policy type.
Be honest with your insurer about your rental frequency. Misrepresenting occupancy is a form of material misrepresentation that can void your coverage entirely.
Colorado and Arizona Short-Term Rental Regulations
Both Colorado and Arizona have local regulations governing short-term rentals. Many municipalities require permits, impose occupancy taxes, and set limits on rental frequency. Some HOAs prohibit short-term rentals entirely.
Operating a short-term rental in violation of local regulations can complicate insurance claims and create additional liability exposure. Make sure you are operating legally before worrying about insurance.
The Bottom Line
If you are renting your home on Airbnb or VRBO, you need coverage specifically designed for short-term rentals. Platform protection programs are not sufficient. Your homeowners policy almost certainly does not cover it.
Talk to a RightQuote advisor about your short-term rental situation, or explore landlord and rental property insurance options.
Part of the Landlord Insurance Guide.