Homeowners Insurance for Vacation Rentals and Airbnb Short Term Rentals

When you buy a home of course you need homeowners insurance. Not only is it a good idea to insure an extremely valuable asset against calamity, but you can’t get a mortgage without proof of insurance. Your bank doesn’t want to see your home get damaged and then you walk away from paying them back because you can’t afford to fix it up.

However, like many things about vacation rentals, homeowners insurance for short term rentals is a little tricky. Most run-of-the-mill homeowners insurance policies aren’t geared towards short term rentals and may not cover you if you a guest has an issue that results in the destruction of your home.

Traditionally, there were two kinds of homeowners insurance. Insurance for your primary residence, or insurance for landlords with long term tenants. Neither of those options cover you if you have a short term guest who accidentally burns down your home. Airbnb and Vrbo do have host guarantees to help compensate you for any issues from their guests, but it’s not really an insurance policy and not a substitute for one. Please be advised that this is not insurance or legal advice and you should contact a profession for help navigating this property.

There are a number of insurance companies that have filled this void and provide homeowners insurance for short term rentals. These companies also typically will insure you for lost income if you’re unable to rent out your place because of damage. In addition to insuring against property damage, they also provide liability coverage. We’ve used two of the three below and their rates are rather reasonable.

CBIZ Vacation Rental Insurance. We use them for our property in Sonoma. As far as I know they’re the original company that has provided short term rental homeowners insurance.

Proper Insurance. We use them for our property in Hawaii. They’re supposed backed by Lloyd’s of London.

Foremost insurance. We’ve never used them, but they are the third company that people mention as providing insurance for vacation rentals.

In addition to our homeowners insurance, we also have a umbrella insurance policy from GEICO to cover additional liability claims beyond the homeowners insurance.