Does Home Insurance Cover Vacation Rentals? Here’s What You Need to Know

Listing your home—or a second property—on Airbnb or VRBO can be a great way to earn extra income. But here’s a question that catches many homeowners off guard: “Is my home insurance still valid if I rent it out short term?”

The answer isn’t always simple. In fact, many homeowners assume they’re covered… until a guest damages their property or gets hurt, and the claim gets denied. Before you hand over the keys to your weekend guests, here’s what you need to know about the risks, the gaps, and the insurance solutions that protect vacation rental hosts.

What Does Standard Homeowners Insurance Actually Cover?

A typical homeowners insurance policy is designed for owner-occupied properties. It’s built to protect your home, belongings, and liability as long as you’re the primary resident. That includes coverage for:

• Fire, wind, or storm damage
  
• Theft or vandalism
  
• Personal property
  
• Liability for accidents on your property
  

But once you start using your property like a business—aka renting it out to strangers for short-term stays—you’re entering a very different risk category.

When Home Insurance May NOT Cover Vacation Rentals

Here’s the catch: most home insurance policies exclude coverage when a property is used as a rental, especially if it’s a short-term or recurring arrangement.

Common issues that could be denied under a standard policy:

• A guest slips and falls in the shower
  
• A fire starts due to careless cooking
  
• Your furniture is damaged or stolen
  
• Your neighbor’s property is damaged due to your guest’s actions
  

Why? Because these events happen during business use of your home, which requires specialized coverage.

What About “Occasional” Rentals?

Some insurance companies may allow occasional rentals—like a one-time weekend during the year—with prior notice or a special endorsement. However, regular or frequent listings on platforms like Airbnb or VRBO typically require different coverage altogether.

Always ask your insurance provider what qualifies as “occasional” versus “commercial use.”

What Kind of Insurance Do I Need for Vacation Rentals?

If you’re planning to host guests more than just once in a blue moon, you’ll need something more tailored. Here are the options:

1. Short-Term Rental Endorsement

Some insurers offer a special endorsement or rider that modifies your homeowners policy to include short-term rental coverage. It usually protects:

• The structure of your home
  
• Your belongings
  
• Liability while guests are staying
  

Best for: Owner-occupied homes that are rented out occasionally.

2. Landlord or Rental Dwelling Policy (DP3)

This type of policy is designed for non-owner-occupied properties rented out long-term or frequently. It typically includes:

• Dwelling protection
  
• Liability coverage
  
• Loss of rental income (in some cases)
  
• Limited personal property coverage
  

Best for: Secondary homes or investment properties used as rentals.

3. Vacation Rental Insurance (Specialized Policies)

Some companies offer full-fledged vacation rental policies built for Airbnb, VRBO, and similar platforms. These may cover:

• Guest-caused damage
  
• Lost income from cancellations
  
• Legal liability
  
• Amenities like pools or bikes
  

Best for: Hosts who list frequently or rely on vacation rental income.

What About Airbnb’s “Host Guarantee”?

Yes, Airbnb offers a $3 million Host Guarantee and Host Protection Insurance, but these programs have significant limitations. They:

• Don’t replace proper insurance
  
• May exclude certain types of damage
  
• Have complex terms and claim processes
  

Translation: You should never rely on platform protection alone.

Before You List Your Property…

If you’re thinking about renting your home to travelers:

1. Review your current home insurance policy
   
2. Ask your agent if short-term rentals are excluded
   
3. Get a quote for proper coverage based on how often you plan to host
   
4. Disclose everything to your insurer—honesty is key for valid claims
   

TGS Insurance Can Help You Cover All the Bases

Whether you’re renting out your vacation home in Florida or listing your guesthouse in Texas on Airbnb, the right coverage gives you peace of mind and real protection.

At TGS Insurance, we work with a network of top-rated carriers to help you build a policy that actually fits how you use your home—so you’re not left holding the bill when something goes wrong.

Get Covered Before the Next Guest Arrives

Thinking of listing your property? Let us help you make sure your insurance is ready. Request a free quote today, and we’ll find the coverage that fits your rental goals, budget, and peace of mind.