Last Updated on October 15, 2026 by Syed Sarim Naqvi
Short-term rental insurance is a policy built for homes that earn money from paying guests, covering the building, contents, guest liability and often lost rental income. A standard homeowners policy usually excludes regular short-term renting, Airbnb’s free AirCover is not a full insurance policy, and a dedicated host policy typically costs about $1,000 to $5,000 a year per property.
Key Takeaways
- Most homeowners policies treat regular short-term renting as business use and exclude the claims that come with it
- Airbnb’s AirCover for Hosts includes up to $3 million in damage protection and up to $1 million in liability insurance, but Airbnb says the damage protection is not insurance and both parts carry exclusions
- Dedicated host policies are reported at $1,000 to $3,500 a year in one guide and $2,000 to $5,000 in another, so costs depend heavily on location and value
- Professional policies often offer $2 million to $5 million of liability cover, with umbrella options above that
- Many hosts also collect a security deposit or buy a damage plan, because wear and tear and some theft are hard to claim
What Is Short-Term Rental Insurance?
Hostaway defines it as specialist cover for the particular risks of running a vacation rental, including liability claims, property damage and lost income, which standard homeowners cover typically excludes. Hostfully explains that host insurance generally comes in four forms: platform protection, a home-sharing endorsement on a homeowners policy, a dedicated short-term rental policy and commercial coverage. Its advice is to buy a dedicated policy if hosting is regular or the main use of the property.
Which Option Protects What?
| Option | What It Offers | Main Weakness |
|---|---|---|
| Platform protection (AirCover) | Free, automatic damage protection and liability cover on Airbnb bookings | Exclusions and limits; damage protection is not insurance |
| Homeowners endorsement | Adds limited short-term rental cover to your existing policy | Often has strict rental-day caps and limited protection |
| Dedicated short-term rental policy | Property, liability and often income-loss cover written for hosting | Costs more; confirm the carrier explicitly covers rental activity |
| Commercial coverage | Broader business-level protection for larger operators | Higher premiums and underwriting requirements |
What Does Airbnb AirCover Actually Cover?
Hostaway reports that AirCover for Hosts comes with Airbnb bookings and has two parts: up to $3 million in Host damage protection and up to $1 million in Host liability insurance. Airbnb says the damage protection is not an insurance policy, while the liability part is insurance, and both carry exclusions. Steadily notes that AirCover launched in late 2021 as Airbnb’s replacement for the Host Guarantee program and argues it should be treated as supplemental, not as a substitute for a landlord or host policy.
- Common gaps: ChargeAutomation lists wear and tear, mysterious disappearances and damage by unverified guests among the problems hosts discover too late
- Excluded perils: STR Specialist says AirCover excludes many perils, including fire, mold, natural disasters and faulty equipment, and excludes theft unless you can prove the guest was responsible
- Liability ceiling: STR Specialist says AirCover pays up to $1 million, leaving you personally exposed above that unless your own policy has higher limits
- Claim deadlines: STR Specialist says claims must be reported through Airbnb’s Resolution Center within 14 days
How Much Does It Cost?
Estimates vary. Hostfully says a dedicated policy usually costs $1,000 to $3,500 a year for one property, while Hostaway puts it at $2,000 to $5,000 and says that is generally 1% to 3% of annual rental revenue, which hosts should include in operating expenses. Hostaway adds that some providers sell per-booking or per-night cover, which may suit low-occupancy properties. As an illustration only, a home earning $60,000 a year in rental revenue would pay roughly $600 to $1,800 a year at 1% to 3%.
- Property value and location: higher values and storm- or wildfire-prone areas cost more
- Coverage limits: higher liability limits and added income-loss cover raise the premium
- Claim history: past claims push prices up
- Endorsement versus dedicated policy: STR Specialist says an endorsement may cost less but offers limited protection and rental-day caps
Why Is a Homeowners Policy Not Enough?
Hostfully says most carriers treat regular short-term renting as a business use the policy was not written for, so claims arising from guests are often excluded. Hostaway adds that flood and earthquake cover need separate policies, and the Hostfully guide recommends checking that your carrier explicitly covers short-term rental activity rather than simply tolerating it. Hosts also commonly ask for a certificate of insurance, a document that proves the policy and states its limits, to show platforms, lenders or property managers.
How Does This Connect to the Rest of Specialty Insurance?
Rental hosting is another case where a personal policy meets business use. Compare it with Food Truck Insurance Explained, where personal auto cover also falls short, and Key Person Insurance Explained for protecting a business that depends on one owner. For the asset side, see Yacht and Boat Insurance Explained, which also relies on specialist policies and strict conditions.
FAQ
Does homeowners insurance cover Airbnb?
In most cases no, because carriers treat regular short-term renting as business use and exclude related claims.
Is Airbnb AirCover real insurance?
Partly. The liability part of AirCover is insurance, up to $1 million, while Airbnb says the $3 million damage protection is not an insurance policy.
How much does short-term rental insurance cost?
Reported ranges are about $1,000 to $3,500 or $2,000 to $5,000 a year per property, often 1% to 3% of rental revenue.
What does AirCover not cover?
Exclusions include wear and tear, mysterious disappearances and many perils such as fire, mold and natural disasters, depending on the part of AirCover.
How much liability cover should a host have?
Professional policies commonly offer $2 million to $5 million, with umbrella options above that, compared with AirCover’s $1 million.
Do I still need a security deposit?
Many experienced hosts still collect one, because some damage and wear-and-tear issues fall outside platform protection.
What is a certificate of insurance?
It is a document that proves you hold a policy and states its limits.
Glossary
- AirCover for Hosts: Airbnb’s free host protection, with damage protection and liability insurance.
- Home-Sharing Endorsement: an add-on to a homeowners policy for limited short-term renting.
- Dedicated STR Policy: a standalone policy written for vacation rentals.
- Loss of Income: cover for rent lost while the property is repaired after a covered event.
- Umbrella Policy: extra liability cover above the primary limit.
- Certificate of Insurance: proof of a policy and its limits.
Sources
- Hostaway: Short-Term Rental Insurance Glossary (definition, cost range, AirCover limits)
- Hostaway: Vacation Rental Insurance Guide (damage protection not insurance, certificates)
- Hostfully: Airbnb Insurance for Hosts, Coverage, Costs and Choosing a Policy (four policy types, cost range)
- Steadily: Airbnb AirCover Explained (launch history, why it is supplemental)
- ChargeAutomation: Airbnb Insurance, What AirCover Covers and Does Not (common gaps, security deposits)
- STR Specialist: AirCover Isn’t Insurance (exclusions, liability limits, claim deadline)
- PriceLabs: Airbnb AirCover vs Insurance (flood and earthquake gaps, traditional policy limits)
Related reading: Classic Car Insurance Explained · Drone Insurance Explained · Private Jet and Aircraft Insurance Explained
Published October 2026. Prices and plan terms vary by insurer and change often; always read what your policy excludes and refresh this article periodically.
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