SHORT-TERM RENTAL INSURANCE FOR OWNERS
Most short-term rental owners overlook the need for specialized insurance, falsely assuming their Homeowners or Landlord policy covers their STR business. But when you hand the keys to a paying guest, standard policies break down, exposing gaps in coverage for guest-caused damage, guest accidents or injuries, and income if your property is unlivable.
One policy built to completely replace standard coverage for your short-term rental.
Homeowners and Landlord Insurance Isn’t Designed for Short-Term Rental Risks
Standard Policies Leave Short-Term Rental Owners Exposed
Homeowners policies were written to protect personal residences. Landlord policies were designed for long-term tenants on a lease. But a short-term rental is operationally closer to a hotel than it is to a residence. That mismatch between use and risk is where the gaps in coverage appear. Most owners don’t discover the following gaps until they’re filing a claim with a standard provider:
Damage, theft and vandalism by a guest
Liability for guest accidents or injuries
Loss of income if property is unlivable
Any claim at a property with “business activity”
Amenity liability, on-and-off premises
Invasion of privacy, liquor liability, and more
The Industry’s Only Commercial Homeowners Policy
The Proper Policy is a unique Commercial Homeowners policy that is second to none in the vacation rental industry when it comes to superior coverage paired with exceptional claims handling.
Since 2014, more than 200,000 vacation rental owners and Airbnb hosts have chosen the Proper Policy to protect their short-term rental business.
Our Commercial Homeowners policy has the horsepower needed to adequately insure the property and contents, and also contains Commercial General Liability insurance, which is a must for any short-term rental owner.
The Basics of Specialized Short-Term Rental Coverage
A well-written home insurance policy for a short-term rental will protect you from liability claims, property and contents damage, and lost revenue when your property is unlivable. Plus, it will provide coverage in the case of damage from a guest, including vandalism, theft or fire. A short-term rental insurance policy for owners should also remain active no matter how the property is used whether personally, by short-term rental guests, and even during periods of vacancy.
Damage to Your Property & Contents
Liability Involving Your Guests
Loss of Business Revenue
Understanding Insurance for Short-Term Rentals
Not all short-term rental insurance is created equal, and yet many clients shop for a policy based solely on price. This is because most domestic insurers have marketing campaigns built around saving money instead of focusing on the actual coverage or protection the policy provides.
At Proper Insurance, we take a different approach. We lead with education, so owners and hosts understand exactly what their policy covers and what they’re paying for. And with superior coverage and exceptional claims handling, Proper has earned the exclusive endorsement of Vrbo and is considered the nation’s best short-term rental insurance provider.
Proper Insurance offers specialized coverage to meet the needs of short-term rental owners with one policy that completely replaces inadequate standard coverage with robust protection for building(s), contents, liability, and business revenue.
Specialized Short-Term Rental Insurance Policy Highlights
- Commercial Homeowners policy designed to completely replace your current coverage
- $1,000,000 of Commercial General Liability ($2M optional)
- Special cause of loss (all-risk) on the building and contents
- Replacement cost valuation for building(s) and contents (new for old)
- No sub-limit on damage caused by a guest, theft, or vandalism
- Liability extended to amenities: pools, hot tubs, bicycles, exercise equipment, small watercraft + more
- Actual loss sustained business revenue with no time limit
Proper Insurance vs. Standard Policies for Short-Term Rentals
| Coverage | Proper Insurance | Homeowners Insurance (HO) | HO + Home-Sharing Endorsement | Landlord Insurance (DP) |
PropertyProperty example: A natural disaster occurs like a tree falling on your home. |
Homeowners Insurance: Exclusion for business activity
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HO + Home-Sharing: If your Airbnb is not your primary home, your HO coverage with an endorsement is likely null and void.
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Damage, theft and vandalism by a guestDamage, theft and vandalism example: Guest throws a party and damages the contents of the home and structure |
Landlord Insurance: Covers theft and vandalism if NOT by your Airbnb guest (property entrustment). Limited contents coverage.
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Liability on premises Liability on premises example: Guest slips and falls exiting the shower at your rental. |
HO + Home-Sharing Endorsement: If your Airbnb is not your primary home where you live, your HO coverage, even with an endorsement, is likely null and void.
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Liability off premises Liability off premises example: Guest gets injured while off your property line (like at the beach of your waterfront rental or guest burns your neighbors house down/dog bite – someone gets hurt off property ties it back to you) |
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Replacement costs Replacement costs example: Roof damage from a covered cause of loss |
Proper Insurance: Pays pure replacement cost – the full amount needed to replace damaged item (new for old). No depreciation deducted.
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Homeowners Insurance: More often than not this would be responded to, however the business activity exclusion found in HO policies could result in no coverage.
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HO + Home-Sharing Endorsement: Typically, pays “actual cash value,” which includes depreciation. The insurer may pay you only $10,000. If this is not your primary home, you may receive $0.
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Landlord Insurance: Typically, pays “actual cash value,” which includes depreciation. The insurer may pay you only $10,000.
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Loss of income Loss of income example: A claim occurs at your property that takes your Airbnb out of business |
Proper Insurance: Provides a check for the actual revenue lost up to the limit of your choosing.
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HO + Home-Sharing Endorsement: Some endorsements may extend limited coverage to use “loss of use” as “loss of rents.” However, you may not have enough to cover additional living expenses and loss of income.
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Landlord Insurance: Provides a check for “loss of rents,” which is based on the average from your area, including long-term rentals.
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Liability for amenities Liability for amenities example: If a guest gets injured or worse from your provided bikes, kayaks, pool, hot tub, etc. |
Landlord Insurance: Only covers amenities that are confined to your property line.
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Vacancy Vacancy example: Damage occurs at the property during the shoulder season or period of vacancy |
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Invasion of privacy Invasion of privacy example: House cleaner accidentally walks in on a guest before they check out |
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Airbnb squatterAirbnb squatter example: A person rents your property for one week but overstays their checkout period by three months and is now protected by law as a tenant |
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Bed Bugs Bed Bugs example: Liability from bed bug bites and the cost to exterminate them |
WHEN YOU OPEN THE DOOR TO GUESTS, YOU ALSO WELCOME RISK.
Standard insurance isn’t designed for the baggage that comes with hosting. With Proper Insurance, gain a dedicated risk manager who will help you identify your exposure and provide coverage that’s tailored to your unique short-term rental.
Download the only checklist you’ll need to prepare Airbnb for guest safety, liability protection, and rave-worthy stays.
Are Short-Term Rentals Required to Have Commercial Insurance?
In a growing number of cities, yes. Short-term rental ordinances increasingly require proof of liability insurance to issue a permit, treating STRs the same way they treat hotels and bed and breakfasts. Proper’s Commercial Homeowners policy meets and exceeds those requirements. Where it’s not legally required, your exposure as an owner or host is still the same.
A short-term rental operates more like a micro-hotel than a residence: guests stay overnight, use the amenities, and expect the same level of safety they’d get from any hospitality business. Short-term rentals compete with hotels for travel lodging and are subject to the same hospitality laws. Standard Homeowners and Landlord policies aren’t built for that. They don’t underwrite a property for public safety because they assume the property isn’t open to the public.
What insurance do you need for short-term renting?
Short-term rentals should ideally carry Commercial insurance which provides a higher level of underwriting, ultimately meaning safer properties for the public. Proper Insurance offers a level of protection unmatched in the industry, but not every property is a fit. Having a Commercial insurance requirement for short-term rentals is good for the owners and good for the city. Other hospitality entities including bed and breakfasts and hotels carry Commercial insurance, short-term rentals should be no different.
Real Review of Proper’s Coverage & Claims
“When a group of guests accidentally burned down our sauna, we were overwhelmed and unsure how we would recover from the loss, both financially and operationally. Enter Proper Insurance. Their claims process was incredibly efficient, compassionate, and stress-free. I can’t imagine another company stepping up like they did. Proper has earned a #1 fan in me, and I’ll be recommending them to every fellow STR owner I know. If you truly want to protect your short-term rental business, don’t cut corners when it comes to insurance. Get Proper. They are actually there when you need them most.”
– Jessica Z.
Proper is the Leading Provider of Short-Term Rental Insurance
Having short-term rental home insurance has never been more important. You have worked hard to turn your property into an income-generating asset, so it should be protected like one.
The Proper Policy a Commercial Business policy that is designed to entirely replace the current insurance you have for your home. It provides comprehensive coverage for your building(s), contents, and business income, and comes with $1,000,000 of Commercial General Liability standard. Get a quote and upgrade your short-term rental insurance today.
Frequently Asked Questions: Short-Term Rental Insurance for Owners
What is the best insurance for short-term rentals?
At Proper Insurance, we believe the best insurance for short-term rentals is a policy that’s built specifically for the job. That’s why we offer a Commercial Homeowner’s policy—a unique blend of coverage that replaces your standard Homeowners or Landlord policy and is designed for short-term rental use from day one. Our policy combines property, liability, and business income protection into one comprehensive package. We cover what most others don’t, including guest-caused damage, loss of business revenue, liability for amenities like hot tubs and bikes, and even invasion of privacy and squatters.
So, what’s the best insurance for vacation rental homes? We’d say it’s one that understands the risks, closes the gaps, and treats your rental like the business it is. That’s exactly what we do at Proper.
Do I need liability insurance for short-term rentals?
Yes, hosts and property managers alike need liability insurance for short-term rentals. With the United States being a sue-happy environment, STR professionals can be sued for anything from slip-and-falls to bodily injury from bed bug bites. To protect yourself and your business income, look for a policy with a minimum of $1,000,000 per occurrence and one that includes all legal fees above and beyond your occurrence limit.
What happens if my property is unrentable after guest-caused damage?
If guest-caused damage renders your short‑term rental unrentable, a standard Homeowners or Landlord policy simply won’t cut it—it either excludes damage by guests or caps lost income at long‑term market rates. However, Proper Insurance includes both guest‑damage coverage and “Loss of Business Income” (also called Business Revenue) as part of our specialized short‑term rental policy.
This Business Revenue coverage is particularly powerful because it pays out based on your actual gross or net rental income, not just an average or market benchmark—and it can be customized for how many months of income you want protected, with no time limit until your chosen cap is reached.
Will Homeowners insurance work for vacation rentals?
Without a highly specified insurance rider (that still has coverage gaps compared to Proper), Homeowners insurance crumbles once you file a claim for your Airbnb through traditional insurance. When brokers discover you are generating income in your home, which goes against nearly all policy language, your claim will be denied and coverage becomes null and void.
What is Proper’s AM Best Rating?
Proper Insurance policies are underwritten by Lloyd’s of London, which holds an A (Excellent) rating from AM Best. This rating reflects strong financial stability and a proven ability to meet ongoing insurance obligations, giving policyholders confidence in long-term claims support.