Does Home Insurance Cover Airbnb Rentals?

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Airbnb has revolutionized the travel and tourism industry. People all over the world are renting out their properties to paying guests or “home sharing.” Airbnb rentals range from affordable to outright luxurious.
That being said, many people rely on Airbnb for their primary or additional income. If you are renting out an Airbnb property, do you know if you have an adequate amount of insurance coverage? And, more importantly, do you know if your home insurance policy will apply if you decide to turn your home into a vacation rental?

Will my homeowners policy cover Airbnb rentals?

Probably not.
Your homeowners insurance policy is designed to protect your home from unpreventable and unexpected perils. Therefore, becoming an Airbnb host and inviting a paying guest into your home changes the name of the game. In other words, it turns your residential home into a business.
The moment you start making money off of a property, it becomes a business. The problem? Homeowners insurance excludes business activities.

How can I protect an Airbnb rental?

If you’re interested in turning your home into a short-term rental, here’s what you can do to make sure you have the adequate amount of insurance coverage.
Temporary Rental Endorsement: If you already had a homeowners insurance policy purchased before you turned your home into an Airbnb, instead of buying a new policy, you may be able to add a temporary rental endorsement to the existing one. This addition would then protect your home and newly founded business. However, this will depend on the insurance company since some do not offer temporary rental endorsements and will require you to buy a separate policy instead.
Short-term Rent Insurance Policies:Since Airbnb and other home sharing sites have become so popular, select insurance companies have created policies specifically for home sharing. So, if your current insurance company does not allow for a temporary rental endorsement, you can find a company that offers a short-term rent insurance policy instead.

What do rental endorsements and short-term rental insurance policies cover?

While the specific coverage may change depending on the policy and company you choose, these are some of the things you could be protected against:
Rental property damage: This applies to damage to your home and its contents.
Loss of rent income: If you suffer a cancellation due to a reason that is covered by your policy, the insurance company will compensate you for the loss of income.
Theft protection: If something is stolen (by a renter or a burglar), your insurance company may reimburse you for the loss.
Damage to the property of others: If you, your guests, or your property causes damage to the property of others, your insurance company could help you with these costs as well.

Does Airbnb provide insurance?

Airbnb automatically offers two services to everyone that rents on their website; however, it is still advisable to obtain your own insurance because making claims through Airbnb could potentially be a difficult process. The first is Airbnb’s Host Protection Insurance, which provides up to $1,00,000 USD in liability insurance in case someone is hurt or injured while staying on your property.
The second is Airbnb’s Host Guarantee, which provides up to $1,00,000 USD in property damage protection in case one of your guests (or their friends) breaks something on your property.

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