Does Your Homeowners Insurance Cover Short-Term Rentals?

Thinking about listing your home on Airbnb or Vrbo? It’s a great way to earn some extra income, right? But did you know that if you don’t tell your insurance company, your coverage might be void?

Today, I’ll walk you through exactly how major insurance companies handle short-term rentals (STRs)—so you can protect your home, your guests, and your wallet.

Introduction

Hey everyone, I’m from Trailstone Insurance! I love using Airbnb and Vrbo when I travel—they make finding a place to stay so easy. But if you’re on the other side of things and renting out your own property, you could be opening yourself up to a major insurance gap that many homeowners don’t even realize exists.

A lot of people assume their standard homeowners insurance covers short-term rentals (also known as STRs), but in most cases, it doesn’t. If a guest damages your home or gets injured, your claim could be denied unless your insurer knows about the rental.

So, let’s break it down—how do different insurance companies handle STRs? And what do you need to do to make sure you’re fully covered?

How Standard Homeowners Insurance Treats STRs

Your standard homeowners policy is designed to cover things like fire, theft, and liability—but most policies exclude business activities, including short-term rentals.

That means if a guest breaks something or suffers an injury, you could be stuck paying for it yourself.

To protect yourself, you need either:

Add an endorsement (policy add-on for STRs), OR
Get a separate short-term rental policy

Now, let’s look at how each of the major insurance providers handle short-term rentals.

How Different Insurance Companies Handle STRs

Allstate

HostAdvantage covers theft and property damage during rentals.
Does NOT cover guest injuries or liability—extra coverage may be required.

American Family Insurance

Covers STRs for up to 62 days per year.
Beyond that, additional coverage is required.

Proper Insurance

Recommended by Airbnb—replaces a homeowners or landlord policy with full STR coverage.
Covers property damage, liability, and loss of rental income. This is the gold standard.

CBIZ Vacation Rental Insurance

Offers custom policies for different types of rental properties.
Covers damage, liability, and lost rental income.

Auto-Owners Insurance

Standard homeowners policies do NOT cover STRs.
Rental dwelling policies available but primarily for long-term rentals.

Openly

Homeowners insurance includes home-sharing and STR coverage.
Policies can be customized for STR hosts.

AAA (American Automobile Association)

Standard homeowners policies don’t automatically cover STRs.
May need additional endorsements for rental coverage.

Safeco Insurance

Covers long-term rentals, but not short-term rentals under a standard policy.
STR hosts must add a specific endorsement for coverage.

Travelers Insurance

Does NOT offer STR coverage under standard homeowners policies.
Rental endorsements may be available, depending on the state.

Nationwide Insurance

STRs excluded from homeowners policies.
Landlord policies may be modified to cover STRs, but rentals must be disclosed.

Progressive Insurance

Does not offer standard STR coverage—no STR-specific policies widely available.
Endorsements may be available in certain areas.

Farmers Insurance

Covers landlords, but primarily for long-term rentals.
STR hosts need extra endorsements or a separate policy.

State Farm Insurance

Must disclose STRs to avoid denied claims.
Rental property insurance can be customized for STRs, but rentals must be disclosed.

Liberty Mutual Insurance

Does NOT offer STR coverage under standard homeowners policies.
Requires additional STR endorsements.

Real-Life Examples for STRs

Here’s an example from a State Farm insured:

Michael rented out his home for a weekend. A guest slipped on the stairs and sued him for medical expenses. His insurance company denied the claim because they didn’t know he was renting. Michael had to pay thousands out of pocket.

But here’s an example from one of our clients:

Lisa did it right—she called us, got the right coverage, and when a guest accidentally started a kitchen fire, her policy covered repairs AND lost rental income.

She saved thousands—because she planned ahead.

Your Next Step

Here’s your next step: check your insurance policy today. Call your provider and ask:

Does my policy cover STRs?
Do I need an endorsement or a separate policy?
What are my liability protections?

And if you’re still unsure, Trailstone Insurance can help! We’ll find the right coverage for your rental property, so you can host with peace of mind.

Protect your home. Protect your guests. And keep that rental income stress-free. See you next time!