Thinking of Renting Your Home on AirBnB? Here’s What You Need to Know About Insurance
With the growing popularity of home-sharing platforms like AirBnB and VRBO, many homeowners are discovering new ways to earn extra income by renting out their homes or vacation properties. While the idea is appealing, it’s important to understand the insurance implications before listing your property.
At Overbay Insurance Services, we want to make sure you’re protected. Here’s what you need to know about insurance coverage when renting your home through a short-term rental platform.
Homeowners Insurance May Not Cover Short-Term Rentals
Most standard homeowners insurance policies (HO-3) are designed to cover owner-occupied residences. Once you begin renting your property to guests, especially on a short-term basis, it may be considered a business activity, which is often excluded from coverage.
This means that if a guest is injured or damages your property, your standard homeowners policy might not provide any protection. That’s a significant risk.
AirBnB’s Host Guarantee Isn’t a Replacement for Insurance
AirBnB offers a Host Guarantee, which claims to provide up to $1 million in coverage for damage to your property. However, this is not an insurance policy, rather it’s a program with limitations, exclusions, and no guarantees of payment.
AirBnB also offers Host Protection Insurance, which can provide liability coverage if a guest gets hurt. But again, there are gaps and limitations, and it may not be enough to fully protect you, especially if a lawsuit arises.
Consider a Short-Term Rental Endorsement or Commercial Policy
Depending on your insurance company, you may be able to add a short-term rental endorsement to your existing homeowners policy. This add-on may extend coverage to occasional rentals, but usually it has limitations on the number of rental days per year and the types of damages covered.
For more frequent or full-time short-term rentals, you’ll likely need an insurance policy specifically designed for rental properties. These policies can be written on a personal policy form or a commercial policy form. These policies provide:
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Property coverage (structure and contents) for damage caused by guests
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Liability protection if a guest is injured or causes damage to others
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Loss of rents/Business income coverage for lost rental income due to a covered claim
If You Have a Mortgage, Your Lender Might Have Requirements
Many mortgage lenders require the property to be insured under a homeowners policy instead of as an investment property. We work with insureds and lenders to make sure the policy that is being written is acceptable before coverage is bound.
Local Regulations and HOA Rules Also Matter
Beyond insurance, make sure you understand the local zoning laws, city ordinances, and any homeowners association (HOA) rules that apply to short-term rentals. Some areas require specific permits or restrict the number of nights you can rent.
Our Advice? Talk to an Independent Agent First
Before listing your home on AirBnB or a similar platform, speak with a knowledgeable independent insurance agent—like us at Overbay Insurance Services. We’ll help you:
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Review your current coverage
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Understand what’s excluded
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Recommend the right policy or endorsement
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Find carriers that support short-term rental properties
Final Thoughts
Renting your home through a short-term rental platform can be a great source of income, but it comes with risks. Don’t assume your current insurance has you covered. Let Overbay Insurance Services help you protect your home, your guests, and your peace of mind.
Ready to get started?
Contact us today for a personalized insurance review.
