Does home insurance cover Airbnb rentals? The answer is usually no. A standard homeowners insurance policy doesn't cover damage caused by renters, including short-term renters from apps like Airbnb. 

Before you list your home on a rental site, you need to look into your coverage to make sure you have homeowners insurance that covers Airbnbs and other short-term rental situations.

Why standard homeowner’s insurance isn’t enough for Airbnb hosts

Standard homeowner's policies don't usually cover rental properties. This is because home insurance is what’s called a “personal line.” As such, it has restrictions and exclusions for business activities – i.e., anything that makes the homeowner money. So if something goes wrong resulting from your money-making activity (i.e., hosting guests), your homeowner's policy likely won’t offer coverage.

So what insurance do Airbnb hosts need?

There’s no one-size-fits-all policy for home-share hosts, but there are a few characteristics to look out for when shopping for a policy that covers your Airbnb activity. Here are some of the features to review:

• Primary coverage. This means that, in the event of a claim, it’s clear who has to pay (your primary insurer). It saves a lot of time and hassle when something goes wrong.

• Liability coverage. This will protect you from the cost of injuries that happen to guests, damages guests do to other people’s property, and other liabilities associated with your rental activities.

• Fair rental value coverage. This provision in landlord policies can pay for lost rental income when a covered claim keeps you from renting your home or townhouse.

• Flexible coverage. Some policies let you pay for coverage when you need it rather than paying for a full year, in all cases, by default. This is a nice feature for many Airbnb hosts, who may use the platform only during specific seasons.

Does Airbnb offer insurance?

For hosts that plan to list their properties specifically on Airbnb, the platform does offer special host insurance called AirCover for Hosts. This plan is always included and provides hosts with: 

• Up to $3 million in property damage protection.

• Up to $1 million in liability protection.

• Up to $1 million in Experiences liability protection (for individuals hosting tours and activities).

• A 24-hour safety line.

Host damage protection is not an insurance policy. However, both liability protections are insurance policies underwritten by third-party insurers, some of whom may be excess & surplus carriers. The company also notes that host liability insurance and experience liability insurance are not substitutes for personal coverage.

All three coverages have limitations. For example, Host Damage Protection doesn’t cover normal wear and tear or damage caused by acts of nature. It also only pays for extra cleaning costs in particular situations, not the cleaning costs you incur from normal checkout.

Long story short? Getting covered through Airbnb is easy, but you may want to review the details carefully before you decide if it’s enough coverage for you.

What about self-insuring?

So what should you do if regular homeowner's insurance doesn’t cover Airbnb rentals and Airbnb’s Air Cover for Hosts doesn’t quite fit the bill? Can hosts opt to self-insure instead of buying additional coverage?

Self-insurance essentially means you take on all the risk yourself. In many cases, that means saving up a pot of money to use in case something goes wrong. But it may also involve some kind of risk financing to fund future losses.

Setting aside a cash pile is one thing, but it’s not scientific and it’s also not practical for most people – if you’re renting on Airbnb, you’re probably doing that to either increase your current pile of cash or create one in the first place.

So in summary: Self-insurance for home sharing is seldom a viable option. Your better choice is protecting your property and your finances with an appropriate insurance policy.