Short-term rental insurance

Short-term rental insurance is a property and liability policy written for a home rented to paying guests by the night. You need it because a standard homeowners policy is built for a home you live in and usually excludes or limits business activity, and a landlord policy assumes a long-term tenant. Airbnb's AirCover for Hosts adds damage protection and liability insurance for stays booked on Airbnb, but Airbnb itself says the damage protection is not insurance and that AirCover is no substitute for a policy of your own.

Why a homeowners or landlord policy may not cover guests

A homeowners policy assumes you live in the home. Renting it to guests on a regular basis is a business, and standard homeowners policies typically do not cover business activity. The Insurance Information Institute's 2026 outlook on short-term rentals warns that failing to tell your insurer can lead to denied claims, reduced liability coverage, higher deductibles or a canceled policy. Some insurers allow an occasional rental once you notify them; others require an endorsement; renting regularly calls for a different policy altogether.

A landlord policy, also called a dwelling or rental dwelling policy, is built for a long-term tenant. It covers the building, the appliances and furnishings you leave for the tenant, your liability, and usually lost rent after a covered loss. It does not necessarily contemplate a new group of guests every few nights, so ask in writing whether nightly rentals are covered before you rely on one.

The gap shows up at the worst moment: a guest is hurt on the deck, a pipe bursts during a stay, a party damages the living room. If the policy treats the business use as excluded, you are paying for it yourself.

What Airbnb's AirCover for Hosts does and does not do

AirCover for Hosts is Airbnb's program for stays booked on Airbnb. Its two money parts work differently. As of 2026, Airbnb's help pages describe them this way.

Three more details matter for owners:

• It applies to Airbnb stays. A booking through Vrbo or a direct booking needs your own coverage.
• It may sit behind your policy. From March 1, 2025, for hosts with six or more active listings, Airbnb says the liability program may require your other insurance to contribute or may apply as excess over it.
• Some insurers are non-admitted. Airbnb notes that in certain cases the liability coverage comes from a non-admitted insurer, which may not be subject to your state's insurance rules or protected by its guaranty fund.

AirCover is useful protection. It is not a property policy: it will not rebuild after a fire with no guest at fault, a storm or a frozen pipe.

The policy types to choose from

Coverages to ask for

• The building at replacement cost, what it would cost to rebuild, not its market value.
• Contents and furnishings, which in a short-term rental are worth far more than in a lease.
• Liability, with the limit stated per occurrence, and what is excluded.
• Loss of rental income, sometimes called business income: how it is worked out after a covered loss, and for how many months.
• Guest damage and theft by guests, which some policies limit.
• Ordinance or law, the extra cost of rebuilding to current code after a loss.
• Water backup and equipment breakdown, often sold separately.
• Amenities: pools, hot tubs, docks, kayaks, bikes and fire pits, which some policies exclude or price separately.
• Wind, hail and named-storm deductibles, often a percentage of the building's value in coastal states.
• Earthquake, where it applies, as a separate policy or endorsement.

Questions to ask an agent before you buy

1. Does this policy cover a home rented to guests by the night, for as many nights as I plan?
2. What is the liability limit, and does it apply per occurrence? What is excluded?
3. How is loss of rental income calculated, and for how long?
4. Is the building insured at replacement cost?
5. What are the wind, hail and named-storm deductibles?
6. What does the policy require of me: a permit, smoke and carbon monoxide detectors, a local contact, guest screening?
7. Is the insurer admitted in my state?
8. Is this policy primary, and how does it work alongside AirCover?
9. Can you name my lender as mortgagee and my LLC as the insured, if I buy through one?

What lenders require

On a rental loan, insurance is part of underwriting. Investor lenders commonly ask for:

• A landlord or short-term rental policy covering the building at replacement cost, or at least the loan amount.
• Rent-loss coverage, often six months of rent.
• Flood insurance where required. FEMA's flood program says that if a property is in a high-risk zone (zones beginning with A or V) and the mortgage is government-backed, flood insurance is mandatory; investor lenders commonly require it in those zones as well.
• Wind or named-storm cover in coastal areas, where it may be a separate policy.
• The lender named as mortgagee, usually with "its successors and/or assigns" wording.
• A binder before closing that names the right owner and the right use. A binder with the wrong occupancy, or without the lender named, comes back and can push the closing back.

The premium is also part of the full monthly payment (principal, interest, taxes, insurance and dues) that a DSCR lender divides into the rent. The article on PITIA explains that payment, and the guide to how to calculate DSCR shows the ratio. Insurance is often the slowest condition in storm and wildfire states, which is why the DSCR loan process puts the quote at the very start.

What does short-term rental insurance cost?

There is no reliable single figure, because the premium depends on where the home is and what it is. The biggest drivers are storm, flood and wildfire exposure, the building's age, construction and roof, its replacement cost, the liability limit, the deductibles, amenities such as a pool or hot tub, the number of guests, and the claims history. The Insurance Information Institute puts a landlord policy at about 25% more than a comparable homeowners policy, and notes that the higher turnover and liability exposure of short-term rentals can raise premiums further.

Get two or three written quotes before you make an offer, for the exact address and the use you plan. A rule of thumb is worth little in coastal and wildfire markets, where a quote can run several times the inland figure.

Condos, HOAs and multi-unit buildings

In a condo, your unit policy covers your interior, contents and liability, and the association's master policy covers the building. The Insurance Information Institute notes that one owner's short-term renting can affect the master policy, raising premiums or changing terms for every owner, which is one reason associations restrict rentals. Ask the association what it requires of owners who rent, and confirm short stays are allowed at all; the guide to short-term rental regulations covers how to check.

If you own the rental through an LLC

The insured on the policy should match the owner on title. If the LLC owns the home, the LLC is the named insured, and you may want yourself added as well. Lenders check that the name on the title, the entity documents and the insurance binder all match, and a mismatch is a common closing delay. The guide to buying a rental property in an LLC covers the rest of the paperwork.

General education, not financial, tax or legal advice. Figures are examples: rates, rules and programs change, and every lender sets its own. Last checked November 4, 2026.