How Does Airbnb Insurance Work for Homeowners?

Airbnb’s AirCover provides damage protection and liability insurance for Airbnb hosts at no extra charge. However, there are holes in this coverage that may need to be supplemented by commercial landlord insurance or a homeowners policy with a home-sharing endorsement.

Keep reading to find out what you need to know about Airbnb insurance for hosts and when additional insurance coverage might be necessary.

Key Takeaways All Airbnb hosts get free damage protection and liability insurance through the AirCover program. AirCover doesn’t cover damage from any cause other than your guests so you will need additional coverage to account for wildfires, windstorms and other natural perils. You may need commercial landlord insurance or a home-sharing endorsement for your homeowners insurance policy depending on whether your Airbnb property is also your primary residence. Companies like Allstate, American Family Insurance, Erie Insurance and Proper Insurance offer insurance products specifically tailored for Airbnb hosts.

Do I Need Insurance To Run an Airbnb?

Homeowners insurance generally isn’t required by law, which means you may not have to buy Airbnb insurance unless it is specifically required in your city. In addition, if you run your Airbnb by yourself, you likely won’t be required to buy any sort of commercial insurance since you wouldn’t have any employees. However, if you need to take out a mortgage to purchase a home for any purpose, your lender will likely require you to purchase homeowners insurance.

In any case, it’s recommended that you purchase insurance if you rent out a property you own as an Airbnb.

Although Airbnb automatically provides some coverage for all hosts, you will most likely need to purchase additional insurance to fully protect your belongings and assets.

Will My Standard Home Insurance Cover an Airbnb Property?

A standard home insurance policy likely won’t provide sufficient coverage for an Airbnb property since home-based business activities are commonly excluded from homeowners coverage. If you don’t ever live in the home and instead use it exclusively as an Airbnb, a standard homeowners insurance policy might not provide any coverage at all.

How Does Airbnb Insurance Work?

Airbnb’s AirCover program provides limited coverage to hosts for free. For more extensive coverage, you will likely need to go through a traditional insurance provider to purchase a policy. Unlike AirCover, any extra types of insurance would require you to make regular premium payments.

What Is Covered by Airbnb Insurance?

There are two core components of AirCover for Airbnb hosts: damage protection and liability insurance. Host damage protection covers your home and belongings for up to $3 million in case they are damaged by your guests or their pets. It also pays out lost income if you have to cancel a booking due to damage caused by a previous guest and covers deep cleaning costs if necessary.^[1]

Meanwhile, host liability insurance provides up to $1 million for claim investigation costs and legal expenses if a guest is injured or their belongings are damaged or stolen on your property. Airbnb also offers the same coverage amount for Experiences liability insurance to cover hosts in case a guest is injured or has their belongings damaged or stolen during an Airbnb Experience.^[1]

What Isn’t Covered?

Since host damage protection only applies to damage caused by your guests, it doesn’t account for many of the perils covered by a standard homeowners policy. For example, AirCover won’t pay for repairs caused by wildfires, windstorms, snowstorms and other natural causes commonly covered by home insurance.

Although AirCover insures your cars and boats while they are parked, the same coverage doesn’t extend to moving vehicles. Host damage protection also doesn’t cover losses caused by wear and tear and excludes coverage for currency even if your guests were responsible for the loss of your currency.^[1]

Meanwhile, host liability insurance comes with a number of exclusions including alleged criminal acts committed by the insured, fungus and pollution, contagious diseases, electronic data and, if you make or sell alcohol as part of your business, damages caused by a guest who you caused to get drunk.^[2]

What Type of Insurance Do I Need for My Airbnb?

To make up for AirCover’s blind spots, you will likely need to purchase home-sharing insurance from a traditional insurance company. Home-sharing insurance can take the form of a commercial landlord insurance policy or an endorsement for a homeowners policy.

Home-Sharing Endorsement

Some insurance companies offer home-sharing endorsements that extend property and liability coverage to accessory dwelling units (ADUs) and other rooms or structures that you rent out on your property.^[3] This type of coverage works as an add-on to your existing homeowners policy if you use part of the property you live on as an Airbnb.

You may also be able to get a home-sharing endorsement added to your renters insurance or condo insurance policy, although you should check if your landlord or condo association will allow you to rent out the property as an Airbnb.

Commercial Landlord Insurance

Commercial landlord insurance covers the structure of a home you rent out, other structures on the rental property and any personal belongings you store on the property. It also includes liability coverage in case your tenant is injured or their property is damaged.

If you rent out a second home that you don’t actually live in as an Airbnb, you will most likely need to purchase a commercial landlord insurance policy since the property functions solely as a business rather than doubling as your primary residence.

Are There Airbnb Laws or Restrictions To Host Where I Live?

Numerous states and cities set regulations that dictate what steps you must take to rent out your property as an Airbnb and what limitations there are to home sharing. See below for examples of these laws in popular regions.

California

In Los Angeles, you can rent out part of your primary residence on a short-term basis as an Airbnb for up to 120 nights per year. To rent out your property for more than 120 nights, you must apply for extended home sharing and pay an $850 registration fee. If you want to rent out a second home or vacation rental, you can only host long-term stays of 30 nights or more at a time.^[4]

Similarly, San Francisco only allows you to be an Airbnb host at your primary residence, meaning you live at the home at least 275 days a year or, if you have owned the property for less than a year, you have lived there 75% of the time you have owned it. Hosts have to maintain at least $500,000 worth of liability insurance in San Francisco as well.^[5]

Colorado

In Denver, you can rent out part of your primary residence for a period of 30 days or less if you have a short-term rental business license. This requires paying a $50 fee to get a Lodger’s Tax ID, along with a $50 renewal fee every two years. Then, you’ll have to pay $50 to apply for your license, $100 to receive your license and $100 per year to renew your license.^[6]

District of Columbia

In Washington, D.C., it costs $104.50 to get a two-year short-term rental license that allows you to rent out your primary residence as an Airbnb for periods of 30 nights or less. If you only host guests for more than 30 nights at a time, you are exempt from the short-term rental licensing requirements.^[7]

Florida

Short-term rentals in your primary residence are not regulated by the state government of Florida. However, if your Airbnb would qualify as a vacation rental, you will need to be licensed through the Florida Department of Business and Professional Regulation.^[8]

Hawaii

Whether your Airbnb qualifies as a bed and breakfast (B&B) or transient vacation unit (TVU), you will need to obtain and periodically renew a nonconforming use certificate to host guests for less than 90 days at a time outside of an apartment or resort zone in Honolulu.^[9]

Illinois

Chicago requires residents who want to use their primary residences as Airbnbs to pay $125 to register as a shared housing unit. However, there are different licensing requirements if your Airbnb would qualify as a vacation rental, B&B or hotel.^[10]

New York

In New York City, you are not allowed to rent out a Class A multiple dwelling for less than 30 days unless you are present in the dwelling throughout your guests’ stay. Short-term hosts must also agree to let Airbnb share their hosting and listing data with the city government, although this requirement can be avoided if you only host guests for periods of 30 days or more at a time.^[11]

Oregon

If you host short-term rental stays in Portland, you must acquire a short-term rental permit and register with the transient lodging tax program. You are also required to register your Airbnb as a business, which means you will almost definitely need to purchase commercial insurance.^[12]

How Do I Get Insurance for My Airbnb Property?

Multiple major insurance companies offer some kind of home-sharing insurance that is specifically tailored to the needs of Airbnb hosts. Below are examples of insurance products you can buy to insure your Airbnb property.

Company	Coverage	Description	Other Details
Proper Insurance[13]	Short-Term Rental Insurance	Includes up to $2 million in business liability insurance, building and contents coverage at your property’s replacement cost value and business income protection equal to the actual loss you sustained	Available endorsements include property entrustment coverage, pet and animal liability coverage, bed bugs protection, squatter protection, off-premises amenities liability coverage and liquor liability coverage
Erie Insurance[14]	Home Sharing Insurance	Typically provides between $100,000 and $1 million for property damage, theft and liability claims	Costs as low as $40 to $60 per year and is only available for your primary residence
Allstate[15]	HostAdvantage Homeshare Insurance	Insures your belongings against damage caused by guests for up to $10,000 per rental host period, along with insuring them against theft	Comes with a $25 discount on your first four cleanings from Merry Maids
American Family[16]	Temporary Rental-to-Others Coverage	Covers damage and theft while a guest is in your home	Only applies if someone rents your primary residence while you are away for less than 62 days per year

In addition, you can purchase landlord insurance policies from insurance providers like State Farm, Travelers, Farmers, Liberty Mutual, Safeco, Geico and, if you are connected to the United States military, USAA.