What Airbnb Insurance Doesn’t Cover

Consider yourself lucky if you haven’t had to pull the rip cord and use the “free” insurance included with your Airbnb or VRBO bookings. Horror stories abound across host forums and Reddit threads with unruly guests showing themselves capable of some especially creative forms of mayhem. Operate a short-term rental for long enough and you’ll eventually find yourself combing through the fine print of your insurance policy to figure out how best to cut your losses from guests that broke your house rules with impunity.

Based on our experience operating our own vacation rental portfolio, the last thing you want is to be stuck holding nothing but Airbnb’s AirCover or VRBO’s liability policy. These are useful backstops in some situations, but they do not offer sufficient protection on their own in all circumstances. And if you’re relying on a standard homeowners insurance policy to save the day, you might be in for a rude awakening once your insurer discovers you’re running a short-term rental business instead of living there full-time. Insurers can and do deny homeowner insurance claims all the time as a result of disallowed business activity.

Fortunately, there are some clear steps you can take now to better protect your short-term rental investments, financial position, and day-to-day sanity in the event of a major damage situation. Before we discuss solutions, let’s review some of the inconvenient facts about OTA platform insurance that many hosts don’t discover until it’s too late.

The Platform Insurance Illusion

Both Airbnb and VRBO tout their “free” protection programs as if they’re comprehensive insurance policies. Airbnb’s AirCover for Hosts might sound impressive at first glance:

• $3 million in damage protection (upgraded from $1M in 2024)
• $1 million in liability insurance
• Free for all hosts, automatic with every booking

VRBO’s offering is less generous but still marketed as a key perk for hosts:

• $1 million in liability insurance
• Optional guest damage protection (but guest must purchase it)
• Primary coverage for hosts without their own insurance

Sounds great, right? Free insurance with every booking.

Here’s the problem: These aren’t actual insurance policies in the traditional sense. They behave more like limited reimbursement programs with so many exclusions, deductibles, and restrictions that they can fail when you actually need them most.

Platform “Insurance” Doesn’t Cover Everything

Airbnb AirCover for Hosts: What’s Actually Included

Let’s break down what Airbnb actually covers based on their official terms. We’ll also discuss some critical nuances:

It’s worth understanding upfront that “AirCover” actually bundles two very different programs. Per Airbnb’s own Host Damage Protection terms, the first piece isn’t true insurance. It’s actually a contractual reimbursement guarantee from Airbnb. Only the liability half is genuinely underwritten insurance, per Airbnb’s Host Liability Insurance Program Summary. That distinction matters more than it may seem as a guarantee and an insurance policy are regulated, funded, and enforced very differently.

Host Damage Protection ($3M)

DOES cover:

• Direct physical property damage caused by guests or their invitees
• Damage to parked vehicles on your property caused by guests
• Extra cleaning costs due to guest behavior (smoke odor removal, stain removal, pet accidents)
• Pet damage (replacing chewed furniture, carpets, etc.)
• Income loss for canceled confirmed Airbnb bookings due to guest damage

Does NOT cover:

• Cash, securities, jewelry, precious metals
• Collectibles, fine art, rare or expensive items
• Wear and tear or gradual deterioration
• Damage from pests, vermin, insects (including bed bugs)
• Damage you expected or intended to happen
• Damage to shared/communal areas (HOA common spaces)
• Natural disasters (earthquakes, floods, hurricanes)
• Theft of some types of property

Damage protection claims process:

• Must file within 14 days of the responsible guest’s checkout via the Resolution Center
• The guest gets 24 hours to respond before you can escalate to Airbnb Support for review
• Must provide documentation (photos, receipts, estimates)
• Per Airbnb’s own terms, this program “is not insurance or a financial service”

Host Liability Insurance ($1M)

DOES cover:

• Guest injuries on your property (slip and fall, etc.)
• Damage to third-party property (neighbor’s property, HOA common areas)
• Property damage or theft of guest belongings during their stay
• Legal defense costs if you’re sued

Does NOT cover:

• Your own injuries
• Intentional acts or assault/battery
• Communicable disease transmission claims
• Electronic data loss
• Effective March 2025, hosts with 6+ active listings: coverage may require contribution from other applicable insurance or apply as excess coverage, depending on that policy’s terms

Liability claims process:

• Submit Airbnb’s liability insurance intake form as soon as you’re aware of a bodily injury or property damage incident
• A third-party claims adjuster appointed by the insurer reviews and handles the claim
• This is true underwritten insurance and coverage is issued by Illinois Union Insurance Company or Generali (US) or Zurich Insurance (International)

VRBO: Even More Limited

VRBO’s offering is considerably weaker and leaves many gaping holes in coverage.

$1M Liability Insurance

• Covers guest injuries and third-party damage
• Acts as primary coverage only if you don’t have your own insurance
• 25% deductible applies if you don’t maintain adequate coverage of your own
• Does NOT cover any physical damage to your property

Damage Protection

• Hosts must require guests to purchase it (otherwise it’s optional for guests)
• Coverage amounts are laughably low at only $1,500-$5,000
• Typically only covers accidental damage
• If guests don’t buy it, you’re relying on security deposits alone
• Feels like more of a revenue driver for VRBO than actual protection for hosts

Dangerous Coverage Gaps

Gap #1: Limited Lost Income Coverage

Airbnb’s Host Damage Protection does include income loss, but only for canceling future bookings due to guest damage, not for the full scope of business interruption losses.

What’s covered: If guest damage forces you to cancel upcoming reservations, Airbnb may reimburse those lost booking fees, but only for bookings sourced through the Airbnb platform.

What’s NOT covered:

• Lost income during repairs if you don’t cancel (you just have gaps)
• Opportunity cost of bookings you could have made if calendar was open
• Lost income from reduced pricing due to partial repairs

Real example: Guest’s kitchen fire causes $25,000 in damage and you have $35,000 in confirmed bookings scheduled over the next 8 weeks, $20,000 of which are through Airbnb.

• Airbnb may cover: The $25,000 kitchen repairs + the $20,000 in canceled Airbnb bookings = $45,000
• Airbnb likely won’t cover: The $15,000 of lost revenue from canceled VRBO and Booking.com reservations, costs to store your belongings during repairs, any premiums you paid to get the work done faster, or lost bookings from weeks 9-12 when construction delays prevented you from opening up your calendar.

VRBO coverage: VRBO’s liability insurance offers zero coverage for your lost rental income.

Gap #2: The Party Damage Gray Area

This is where a nuance in AirCover coverage has prevented some hosts from recouping repair costs. Airbnb’s coverage gets complicated when damage occurs during unauthorized events or involves intentional acts.

The policy language: Host Damage Protection excludes “expected or intended injury,” which generally refers to damage the guest intended to cause. But what about a party where some damage was accidental and some was intentional?

The scenario: Guest throws unauthorized party. 50+ people show up. Damage includes:

• Broken furniture (people jumping on couch)
• Shattered TV (someone threw something)
• Holes punched in walls (clearly intentional)
• Vomit stains on carpets (accidental but during unauthorized event)
• Stolen artwork

What Airbnb might cover:

• Accidentally broken items during the stay
• Cleaning costs
• Some structural damage if deemed accidental

What often gets denied or disputed:

• Clearly intentional destruction (punched walls)
• Stolen items (especially cash, jewelry, high-value art)
• Items the guest claims didn’t exist or were already damaged

The real problem: You bear the burden of proof. You must document everything, prove the damage happened during the guest’s stay, prove it wasn’t pre-existing, and also show that the guest was responsible. In the aftermath of a party with 50+ people, you will have a lot of other things on your plate at the same time.

VRBO: The optional Accidental Damage Protection guests can buy ($59-$119 for $1,500-$5,000 coverage) only covers accidental damage, and guests frequently decline to purchase it. And 50+ people can do A LOT more than $5,000 worth of damage!

Gap #3: High-Value Items

Both major vacation rental platforms specifically exclude many valuable items from their “insurance” offerings.

NOT covered by Airbnb or VRBO:

• Cash
• Jewelry and watches
• Fine art and collectibles
• Antiques
• Rare books
• Wine collections
• Musical instruments (some)
• Business equipment over certain limits

Gap #4: Natural Disasters and “Acts of God”

What if a hurricane rolls in off the Atlantic and damages your beachfront rental? Maybe a wildfire burns down your mountain cabin or a once-in-a-lifetime flood ruins your ground floor game room?

When insuring my own vacation rental near Yosemite, I had to shop around heavily because so many standard insurers had stopped writing policies in the Sierra foothills due to wildfire risk. I eventually secured (somewhat) affordable coverage through the California FAIR plan paired with a Difference in Conditions (DIC) policy from a separate carrier. Both include specific riders for short-term rental activity. The DIC policy is particularly inexpensive, thank you Steadily for sourcing this one!

Interestingly, I was also able to secure modest premium discounts on my FAIR plan by proactively retrofitting the foundation with ember-proof vents, trimming back trees, removing combustibles around the structure, and providing evidence that our community participated in the FireWise program. These were all relatively easy tasks to accomplish, help harden the structure against wildfire threats, and save me a few hundred dollars a year.

The Confusion Between Protection Types

Many hosts don’t understand that Airbnb offers multiple separate programs that sound similar but cover completely different things:

Host Damage Protection – Reimburses damage to your property (up to $3M)
Host Liability Insurance – Covers claims against you for guest injuries ($1M)
Host Guarantee – (Deprecated, rolled into Damage Protection in 2024)

When disaster strikes, hosts sometimes file claims under the wrong program, get denied, and only then realize the programs are completely separate with different rules, different exclusions, and different claims processes. By the time the host figures this out, the 14-day claims window may have closed. Pay attention to the fine print and make sure all your ducks are in a row before you file a claim with the platform!

You Need Real Insurance

Most hosts will benefit from real short-term rental insurance from a carrier that specializes in STR. These policies completely replace your homeowners insurance and cover many of the actual risks faced by vacation rental operators.

STR insurance typically includes:

1. Full Property Coverage

• Building replacement (fire, storm, vandalism)
• All contents and furnishings
• NO commercial use exclusion
• Covers guest-caused damage (intentional AND accidental)
• Covers party damage
• Covers theft by guests

2. Lost Income Protection

• Actual loss sustained coverage (not time-limited)
• Covers lost bookings during repairs
• Often covers cancellations due to government orders (COVID-style scenarios)
• No arbitrary caps (covers actual documented income)

3. Liability Coverage

• $1M-$2M standard (higher available)
• Covers guest injuries
• Covers third-party claims
• Includes legal defense costs
• No exclusions for commercial hospitality use

4. Additional Coverages That May Be Available

• Natural disaster coverage (depending on location)
• Pet damage (even “friendly” breeds)
• Mechanical breakdown (HVAC, appliances)
• Emergency repairs and mitigation
• Bed bug infestation remediation
• Crisis management/PR support

Current Top STR Insurance Providers (2026)

	Proper Insurance	Safely (On-Demand)	Traditional + STR Endorsement
Target Host	Dedicated STR investors and full-time DIY landlords.	Hosts utilizing a PMS (Guesty, Hostaway, OwnerRez, etc.)	Homeowners who rent out a room or primary residence occasionally.
Coverage Type	Comprehensive commercial policy. Completely replaces other policies.	Per-booking policy, complements existing landlord insurance.	Standard personal lines with a specific vacation rental rider/add-on.
Liability Limits	$1M to $2M+ commercial liability. Customizable, often no aggregate limit.	Up to $1M liability per incident. Only active during booked nights.	Usually capped at $300k–500k personal liability.
Lost Income Protection	Excellent. Covers “Actual Loss Sustained,” including future booked revenue.	None. Only covers physical property damage and liability during the stay.	Very limited or non-existent. Often explicitly excludes short-term business income.
Pricing Model	Higher annual premium. Expect $1,500–3,000+.	Variable, pay-per-night. Typically $8-14/night.	Modest. Usually adds $50–200/yr to current policy.
Best For…	Total peace of mind for full-time, cash-flowing vacation rental business.	Automating coverage thru PMS, includes guest screening.	Hybrid landlords transitioning a property, or casual hosts on a budget.

Proper Insurance

• Available in all 50 states
• Completely replaces homeowners/landlord policies
• Covers personal AND business use
• Actual loss sustained income coverage
• Covers guest damage (intentional AND accidental)
• Pricing: $1,800-$3,500/year depending on property value and location
• Endorsed by VRBO as their preferred partner

Traditional Carriers with STR Endorsements

• Allstate – STR endorsement available in most states
• Liberty Mutual – Business rental dwelling coverage
• State Farm – Short-term rental policies (state-dependent)
• Farmers – Seasonal rental coverage

CBIZ / Travelers – Typically best for larger portfolios (5+ properties)

The Per-Booking Alternative

If you don’t want the heavy upfront burden of a $3,000+ annual commercial policy, or if you simply prefer to pass on the cost of protection to the guest, there is now a powerful alternative to the traditional carriers.

Safely

• How it works: Instead of an annual policy, Safely provides the “Safely Protection Policy,” which attaches coverage per booking (typically costing between $8 to $14 per night).
• The Coverage: Offers up to $1,000,000 in liability and structural damage protection, plus $10,000 to $25,000 in contents coverage.
• What makes it different: Unlike platform insurance, Safely explicitly covers intentional acts, pet damage, and theft. They even list “Stupidity” (aka “vacation brain”) as a covered peril.
• The Tech Stack: Safely is built to connect natively with Property Management Systems (PMS) like Guesty, Hostaway, OwnerRez, etc.. This means coverage is applied automatically as soon as a guest books.
• Guest Screening: Safely builds rigorous guest screening directly into their workflow, meaning they actively try to prevent bad actors from checking in before a claim ever happens.

Safely is an excellent option for hosts and property managers who use a PMS and want real commercial-grade protection without committing to an expensive annual premium. Because Safely is designed to connect to property management software, it is perhaps not well-suited for casual hosts who only manage their bookings directly on the Airbnb or VRBO apps.

The STR Insurance Stack

Step 1: Get Proper Coverage BEFORE You Start Hosting

Don’t wait until disaster strikes. The right sequence:

1. Contact 2-3 STR insurance providers
2. Get quotes (expect $150-250/month for typical property)
3. Purchase policy before listing on Airbnb/VRBO
4. Cancel your homeowners insurance (if any) after STR policy is active
5. Notify your mortgage lender of the insurance change

Step 2: Treat Platform Coverage as a Bonus, Not Primary Protection

AirCover and VRBO insurance are nice-to-have supplements, but should probably not be considered sufficient protection:

• Best case: Platform coverage handles a small guest accident
• Worst case: Platform denies claim, but your real insurance pays out
• Never rely on: Platform coverage alone for anything serious or substantial

Step 3: Document Everything

• Take photos/videos immediately
• Contact platform support within 24 hours of an incident
• File police report if theft/criminal activity
• Consider also notifying your STR insurance even if platform might cover it
• Keep all receipts, estimates, and correspondence
• Don’t let claims deadlines pass (often 14 days on platforms)

Step 4: Understand Your Own Policy

Read your actual STR policy carefully and take note of the following:

• Your coverage limits (dwelling, contents, liability, income)
• Your deductible (often $2,500-$5,000)
• Your exclusions (flood? earthquake? wildfire? specific items?)
• Your responsibilities (security measures, maintenance, inspections)
• Your claims process (photos? estimates? how to file?)

Special Considerations for 2026

The 6+ Listing Rule (NEW)

As of March 2025, Airbnb’s coverage may be automatically moved into the secondary position if you have six (6) or more active listings. This means:

• Your personal STR insurance pays first
• AirCover only pays after your coverage is exhausted
• You are supposed to maintain robust primary coverage
• Multi-property owners can’t rely on AirCover as primary protection anymore

If you manage 6+ properties, appropriate STR insurance is now clearly a must-have, even if you are exclusively operating through Airbnb bookings.

Rising Insurance Costs

STR insurance premiums have increased 30-50% in some markets since 2023 due to:

• Increased claim frequency (more parties, more damage)
• Natural disaster increases (hurricanes, wildfires, floods)
• Litigation increases (more lawsuits, higher settlements)
• Underwriting losses (insurers paying out more than collecting)
• Rising costs of reinsurance (how insurance companies spread risk)

Expect to pay $2,000-$4,500/year for comprehensive coverage on a typical 3-bedroom STR in 2026, up from $1,500-$3,000 in 2022.

State-Specific Requirements

Many states and/or localities now require specific insurance for STRs and the platform programs rarely meet the requirements on their own. Some examples include:

• Hawaii: STR-specific liability insurance mandatory in many counties
• Palm Springs, CA: Proof of STR insurance required for permit
• Santa Monica, CA: $1M liability minimum required
• Boston, MA: Commercial insurance required for short-term rentals

State and municipal regulations vary wildly, even within the same state. Take Hawaii, for example. While Maui currently does not mandate specific STR insurance requirements to operate, the regulatory environment is completely different on Oahu. The City and County of Honolulu requires all registered STR operators to maintain continuous coverage with a minimum of $1 million in liability (either via a Commercial General Liability policy or a homeowner’s policy with a Business Liability rider).

And while AirCover may technically satisfy the requirements in some jurisdictions, that’s not always the case and you may very well start taking bookings from other OTAs (or direct) that come with less (or no) embedded insurance coverage.

What’s Your Risk Profile?

In our experience, it’s often best to secure an STR insurance policy with coverages matched to your own personal risk profile and resources. Only you can decide how much and what types of coverage you need to sleep peacefully at night with the knowledge that you’re sufficiently protected should something go wrong at one of your short term rentals.

Frequently Asked Questions

Related Articles:

How to Shop for STR Insurance and Compare Quotes – Our step-by-step guide to getting the best policy
LLC for Vacation Rental: Pros & Cons – Asset protection beyond insurance
99 Expert STR Hosting Tips – Including more risk management strategies