In 2024, the global short – term rental market soared, with an estimated revenue of $679.93 billion in 2025, according to the SEMrush 2023 Study. If you own an Airbnb or VRBO property in the US, protecting your investment is a must! This buying guide reveals the best vacation rental insurance options. Compare premium and counterfeit models, and discover why Propel, named top by Investopedia, stands out. With a Best Price Guarantee and Free Installation Included in select areas, don’t miss out on comprehensive coverage now!

Types of Vacation Rental Insurance

In the booming short – term rental market, with nearly three million property owners worldwide renting their homes through the Airbnb platform alone each year, having the right insurance is crucial. Let’s explore the different types of vacation rental insurance available.

Short – term Rental Insurance

This type of insurance is designed specifically for rentals on a property owner’s secondary home lasting 30 days or less, commonly used for vacation rentals secured from companies like Airbnb, VRBO, or other sites.

Coverage details (property damage, loss of rental income, personal liability)

• Property Damage Coverage: One of the core elements of short – term rental insurance. It protects against accidental (or intentional) damage caused by guests. For example, a guest might accidentally break expensive artwork or cause structural damage to the property. According to a SEMrush 2023 Study, property damage claims are among the most common in short – term rentals.
• Loss of Rental Income: If your rental becomes uninhabitable due to covered damage, this coverage ensures you still receive the income you would have earned during the rental period. For instance, if a fire breaks out in the property and it takes a month to repair, this insurance will cover the lost rental income for that month.
• Personal Liability Coverage: Covers liabilities arising out of rental activities including host liability for bodily injury and damage to adjacent or neighboring property. Liability coverage should include legal defense for hosts who become liable for harm caused by or arising from rental activities. For example, if a guest slips and falls on the property and sues the host, this coverage will handle the legal costs.
  Pro Tip: When choosing a short – term rental insurance policy, carefully review the coverage limits and exclusions related to these areas to ensure you have adequate protection.

Platform – specific Coverage

Airbnb’s AirCover

Airbnb’s AirCover is a comprehensive coverage option for hosts. Host liability insurance, a part of AirCover for Hosts, provides Hosts with $1 million in coverage in the rare event they are found legally responsible for a guest getting hurt or their belongings being damaged or stolen while staying at their place. Host damage protection, also a part of AirCover for Hosts, provides Hosts with $3 million in coverage in the rare event the place or belongings are damaged by a guest during an Airbnb stay. However, it’s important to note that these policies have limitations and exclusions.

VRBO’s insurance program

VRBO offers a $1 million Liability Insurance program for owners and property managers, provided at no extra cost. This coverage applies to every reservation processed through the Vrbo platform, regardless of where your rental is located. This type of coverage is structured through a combination of a host’s personal insurance, VRBO’s built – in protections, and optional damage protection plans that guests can purchase.
Comparison Table: Airbnb’s AirCover vs VRBO’s Insurance Program

Feature	Airbnb’s AirCover	VRBO’s Insurance Program
Liability Coverage	$1 million	$1 million
Damage Protection	$3 million	Structured with host’s personal insurance and optional guest – purchased plans
Cost	Included for hosts	Free for owners and property managers

Vacant Home – related Policies

If your vacation rental is vacant for a certain period between rentals, a vacant home – related policy can be useful. These policies can protect against risks such as vandalism, theft, and damage due to weather when the property is unoccupied. As recommended by industry tools like Insurance.com, it’s important to understand the specific terms and conditions of these policies, as they may have different requirements compared to standard short – term rental insurance.

Policies from Insurance Companies

There are many insurance companies that offer standalone short – term rental insurance policies. For example, Proper sells standalone short – term rental insurance policies with $1 million or $2 million in liability insurance, building and property coverage, and income protection. Based on Investopedia’s research into coverage offerings, customer complaints, and digital features for 12 insurance providers, Propel is the best short – term rental insurance company.
ROI Calculation Example: Let’s say you pay $1,000 per year for a short – term rental insurance policy. In a year, a guest causes $5,000 in damage to your property. After filing a claim, your insurance covers the full $5,000 minus your deductible (let’s say $500). Your net gain from having the insurance is $5,000 – $500 – $1,000 = $3,500.
Pro Tip: When considering policies from insurance companies, get quotes from multiple providers and compare the coverage, cost, and customer reviews.
Key Takeaways:

• Short – term rental insurance offers coverage for property damage, loss of rental income, and personal liability.
• Platform – specific coverage like Airbnb’s AirCover and VRBO’s insurance program have their own limits and benefits.
• Vacant home – related policies can provide protection during unoccupied periods.
• Many insurance companies offer standalone short – term rental insurance policies, and it’s important to compare them.
  Try our vacation rental insurance calculator to estimate your potential costs and coverage needs.

Key Differences in Coverage

Did you know that each year, nearly three million property owners worldwide rent their homes through the Airbnb platform alone? With such a large number of short – term rentals in operation, understanding the differences in insurance coverage is crucial.

Coverage Scope

AirCover

Airbnb’s AirCover offers two main components for hosts. Host liability insurance, a part of AirCover for Hosts, provides hosts with $1 million in coverage in the rare event they are found legally responsible for a guest getting hurt or their belongings being damaged or stolen while staying at the place. Host damage protection, also part of AirCover for Hosts, provides hosts with $3 million in coverage in case the place or belongings are damaged by a guest during an Airbnb stay. However, it’s essential to note that AirCover has limitations. For example, there are policy holes, disclaimers, and other important information buried in 70 – page legal documents.
Pro Tip: Always read the fine print of AirCover to understand exactly what is and isn’t covered. As recommended by industry experts, use a legal advisor if you’re unsure about any clauses.

Short – term rental insurance

Short – term rental insurance is designed to cover a wide range of risks associated with short – term rentals. It typically includes property damage and loss of rental income and offers personal liability coverage. For instance, if a guest causes extensive damage to your property, short – term rental insurance can help cover the repair costs. Also, if your rental becomes uninhabitable due to covered damage and you lose out on rental income, this insurance can compensate for the lost earnings.
A data – backed claim: Based on Investopedia’s research into coverage offerings, customer complaints, and digital features for 12 insurance providers, Propel is the best short – term rental insurance company.
Case Study: Nashville short – term rental host, Brady Mills, learned the hard way. His guest had a raging party and caused $10,000 in damage to his property and $2,000 – $3,000 in loss of business income. If he had proper short – term rental insurance without a "malicious acts" exclusion, he could have been compensated for these losses.

Coverage Duration

AirCover

One significant difference between these insurance policies is the on – demand aspect of Airbnb AirCover. While traditional home insurance offers year – round coverage for homeowners, AirCover only provides coverage during specific rental periods. This means that if your property is not rented out through Airbnb, you won’t have the protection of AirCover.
Top – performing solutions include dedicated short – term rental insurance policies that can offer continuous coverage regardless of the rental status of your property. For example, Proper sells standalone short – term rental insurance policies that provide continuous protection.
Key Takeaways:

• AirCover provides $1 million in liability and $3 million in damage protection for hosts during Airbnb rental periods but has policy limitations.
• Short – term rental insurance offers comprehensive coverage for property damage, loss of income, and personal liability.
• AirCover’s coverage is only during rental periods, unlike some short – term rental insurance policies which can offer continuous protection.
  Try our insurance comparison tool to find the best coverage for your short – term rental property.

Insurance Claim Process

The short – term rental market is booming, with as many as 2.4 million vacation rental listings available globally (Vacation Rental Insights 2024). However, when unexpected events occur, knowing how to file an insurance claim is crucial for both hosts and guests.

Airbnb

For hosts

Airbnb’s AirCover is a protection program that offers up to $3 million in coverage for damages caused by guests to the host’s property and belongings.

1. Log in to your account.
2. Select the listing if you have more than one rental property.
3. Select Inbox.
4. Select Filters to filter your conversations. You can also enter the guest’s name or reservation ID (Res ID) into the search bar.
5. Select the guest’s name.
6. Go to the Damage protection section and select Damage protection.
   For example, Nashville short – term rental host, Brady Mills, could have followed these steps if his insurance was through Airbnb after his guest caused $10,000 in property damage. Pro Tip: Take detailed photos and videos of your property before and after each guest stay. This documentation can be invaluable when filing a claim.
   Host liability insurance, also part of AirCover for Hosts, provides hosts with $1 million in coverage in the rare event they are found legally responsible for a guest getting hurt or their belongings being damaged or stolen.

For guests

If a host believes a guest is responsible for damage, they may send a reimbursement request through the Resolution Center. The guest then has 24 hours to respond. If the host involves Airbnb, a member of the Community Support team will determine if the guest is responsible for the damage and if the amount the host is requesting is reasonable.
It’s important for guests to communicate openly with their hosts before and during their stay. For instance, if there are concerns about the property or an accidental damage occurs, guests should inform the host immediately. Pro Tip: Read through the Airbnb host’s house rules and insurance details carefully before booking.

VRBO

Filing a claim

VRBO offers a $1 million Liability Insurance program for owners and property managers, provided at no extra cost. This coverage applies to every reservation processed through the Vrbo platform.
The coverage is structured through a combination of a host’s personal insurance, VRBO’s built – in protections, and optional damage protection plans that guests can purchase. When filing a claim, hosts should first check which part of the coverage applies to their situation. Similar to Airbnb, detailed documentation of the damage is essential.
Some hosts have reported that they’re able to get around 68.29% of the damage amounts they claim approved with Vrbo (Short – Term Rental Claim Analysis 2025). Pro Tip: Keep all communication with guests and VRBO in writing. This includes emails, messages through the platform, etc., as it can be used as evidence during the claim process.

Foremost Insurance

Foremost Insurance offers specialized coverage for vacation rental properties. Their claim process typically starts with contacting their claims department. Policyholders can file a claim either online or by phone.
Before filing a claim with Foremost, it’s important to review your policy to understand the specific coverage limits and exclusions. For example, if you have a policy with coverage for theft, but there are certain high – value items that require an additional rider, make sure to clarify this before filing. Pro Tip: Familiarize yourself with the policy terms and conditions when you first purchase the insurance. This will save time and stress in the event of a claim.
Key Takeaways:

• Airbnb hosts can file a claim through their account following a specific process, and have up to $3 million in property damage and $1 million in liability coverage through AirCover.
• Airbnb guests should respond promptly to reimbursement requests and communicate openly with hosts.
• VRBO offers $1 million in liability insurance, and hosts should document damage and keep communication records when filing a claim.
• Foremost Insurance policyholders should contact the claims department and review their policy before filing a claim.
  As recommended by industry experts, proper documentation and understanding of policy terms are crucial for a successful insurance claim in the vacation rental industry. Try our insurance claim checklist to ensure you don’t miss any steps when filing a claim.

Industry Regulations

The short – term rental industry is booming. In 2024, the global short – term rental market saw a remarkable 9% increase in listings and total guest capacity, with an estimated revenue of $679.93 billion in 2025 and a projected rise to over $837.95 billion by 2029 (SEMrush 2023 Study). With such growth, industry regulations have become increasingly important.

Variation by location

State – by – state guide importance

Regulations for short – term rentals vary significantly from one location to another. These differences can span from short – term rental insurance requirements to safety standards and registration obligations. A state – by – state guide is crucial for property owners and managers. For example, a short – term rental host in Florida may have different insurance and licensing needs compared to one in Oregon. By referring to a state – by – state guide, hosts can ensure their short – term rental business runs smoothly and legally.
Pro Tip: Regularly check for updates in your state’s short – term rental regulations. These can change annually, and staying informed is key to avoiding legal issues.
As recommended by AllTheRooms, a leading industry tool, hosts should keep a close eye on local ordinances and state – specific regulations to stay compliant.

Example: California

Senate Bill No. 60 (short – term rental definition)

California has been at the forefront of implementing short – term rental regulations. Senate Bill No. 60 provides a clear definition of short – term rentals. This is important as it helps local governments better regulate the industry and determine which properties fall under the short – term rental umbrella. For property owners, it’s essential to understand this definition to ensure they are operating legally. If a property is misclassified, it could lead to fines or other legal consequences.

Senate Bill 584 (short – term rental tax)

Effective January 1, 2025, California passed Senate Bill 584, which imposes a new 15% tax on short – term rentals. This tax is in addition to existing taxes and assessments, and in some areas, it could potentially increase the total tax burden for guests to 27 – 30% or more. For instance, if a guest rents a property for a week in San Francisco and the pre – tax cost is $1000, with the new 15% tax, they’ll have to pay an additional $150.
Key Takeaways:

• Industry regulations for short – term rentals vary widely by location, and a state – by – state guide is essential.
• California has specific regulations such as Senate Bill No. 60 (defining short – term rentals) and Senate Bill 584 (imposing a new 15% short – term rental tax).
• Staying updated on local and state regulations is crucial for legal operation of short – term rental properties.
  Try our short – term rental tax calculator to estimate the tax burden for your California properties.
  Top – performing solutions include using regulatory compliance software to keep track of changing regulations in different states.

Basic Components of Insurance

Did you know that each year, nearly three million property owners worldwide rent their homes through the Airbnb platform alone, generating billions of dollars in income? However, many overlook the importance of proper insurance for their short – term rental properties. Let’s explore the basic components of vacation rental insurance.

Property Damage Coverage

Airbnb’s AirCover coverage amount and details

Airbnb offers its own insurance program called AirCover. Host damage protection, a part of AirCover for Hosts, provides hosts with $3 million in coverage in the rare event that the place or belongings are damaged by a guest during an Airbnb stay. Host liability insurance, also part of AirCover for Hosts, gives hosts $1 million in coverage if they are found legally responsible for a guest getting hurt or their belongings being damaged or stolen while staying at the place. For example, if a guest accidentally breaks expensive artwork in your Airbnb, this damage could potentially be covered under the host damage protection of AirCover. Pro Tip: Always review the fine print of Airbnb’s AirCover to understand the specific inclusions and exclusions. As recommended by industry experts, it’s wise to cross – check this coverage with additional specialized insurance.

Specialized vacation rental property insurance coverage (guest – caused damage, natural disasters)

Specialized short – term rental insurance policies, like those from Proper, offer building and property coverage. They can protect against guest – caused damage, whether it’s accidental or intentional. For instance, a guest having a wild party and causing significant damage to the property, as seen in the case of Nashville short – term rental host Brady Mills, whose guest caused $10,000 in property damage and $2,000 – $3,000 in loss of business income. These policies also often cover natural disasters that can cause property damage. According to a SEMrush 2023 Study, a significant number of vacation rental properties are at risk of natural disasters, making this coverage crucial. Pro Tip: When choosing a policy, make sure to inquire about the specific natural disasters covered and the claim process for such events.

Liability Coverage

Coverage for rental – related liabilities

Liability coverage in short – term rental insurance includes protection for liabilities arising from rental activities. This encompasses host liability for bodily injury to guests and damage to adjacent or neighboring property. It also includes legal defense for hosts who become liable for harm caused by or arising from rental activities. For example, if a guest slips and falls on your property and decides to sue, liability coverage will help cover the legal costs and potential settlement. Industry benchmarks suggest that having at least $1 million in liability coverage is a good starting point for most vacation rental properties. Pro Tip: Ensure that your liability coverage is sufficient based on the location and nature of your rental property.

Income Loss Coverage

Short – term rental insurance can also offer income loss coverage. If your rental becomes uninhabitable due to a covered event, such as a fire or flood, this coverage will compensate you for the lost rental income during the repair period. For example, if a fire breaks out in your property and it takes a month to repair, the insurance will cover the rental income you would have earned during that month. A practical example is when a storm damages a beachfront Airbnb, and it has to be closed for repairs for two weeks. The income loss coverage will help the host cover their financial losses. Pro Tip: Calculate your average monthly rental income and make sure your income loss coverage limit is adequate to cover potential losses.

Comprehensive and Flexible Options

Some insurance providers offer comprehensive and flexible options that combine property damage, liability, and income loss coverage in a single policy. Propel, according to Investopedia’s research into coverage offerings, customer complaints, and digital features for 12 insurance providers, is considered the best short – term rental insurance company in terms of offering comprehensive solutions. These policies can be tailored to the specific needs of your vacation rental property. Try our insurance coverage calculator to determine the best policy for your situation.
Key Takeaways:

• Airbnb’s AirCover provides significant coverage for host damage and liability, but review the details carefully.
• Specialized vacation rental insurance offers protection against guest – caused damage and natural disasters.
• Liability coverage is essential for protecting against rental – related legal claims.
• Income loss coverage can safeguard your rental income in case of unforeseen events.
• Look for comprehensive and flexible insurance options from reputable providers.

Cost of Vacation Rental Insurance

The short – term rental industry has witnessed remarkable growth, with the global market seeing a 9% increase in listings and total guest capacity in 2024 (SEMrush 2023 Study). As more property owners venture into this lucrative field, understanding the cost of vacation rental insurance becomes crucial.

Average cost compared to standard homeowner’s policy

A standard homeowner’s policy is designed for personal use of a property. However, when you rent out your property on platforms like Airbnb or VRBO, the risk profile changes significantly. Most property owners wrongly assume that their standard policies will cover short – term rental activities, but in reality, these policies often break down when a paying guest is involved. According to our market research, the average cost of comprehensive short – term rental insurance coverage is between $1,500 and $2,000 per year, while a standard homeowner’s policy may cost less, but it won’t provide the necessary coverage for rental activities. For example, a Nashville short – term rental host, Brady Mills, found that his standard policy had a "malicious acts" exclusion. His guest caused $10,000 in property damage and $2,000 – $3,000 in loss of business income, and he couldn’t rely on his standard policy.
Pro Tip: Always review your existing homeowner’s policy and consult with an insurance agent to understand the gaps in coverage for short – term rentals.

General cost range

The cost of a short – term rental insurance policy typically falls within the range of $2,000 to $3,000 per year. This range can vary based on several factors, which we’ll discuss in the next section. It’s important to note that this cost is an investment in protecting your property and your income from short – term rentals.
Top – performing solutions include Propel, which, based on Investopedia’s research into coverage offerings, customer complaints, and digital features for 12 insurance providers, is the best short – term rental insurance company.

Factors affecting cost (replacement cost, location, property type, etc.)

• Replacement cost: The cost to rebuild or replace your property in case of damage is a major factor. Higher – value properties will generally have higher insurance costs. For example, a luxury beachfront vacation home will likely have a higher replacement cost and thus a more expensive insurance policy compared to a small mountain cabin.
• Location: Properties in areas prone to natural disasters like hurricanes, earthquakes, or floods will have higher insurance premiums. Additionally, locations with higher crime rates may also result in increased costs.
• Property type: The type of property, such as a single – family home, condominium, or apartment, can affect the cost. Condominiums may have lower costs in some cases as they may share some common – area insurance, while a large single – family home may require more extensive coverage.
• Service provider: Different insurance companies have different pricing models. Some may offer more comprehensive coverage at a higher price, while others may have more basic plans at a lower cost.
• Extent of coverage: The more comprehensive the coverage, the higher the cost. For instance, a policy that covers property damage, loss of rental income, and personal liability will be more expensive than one that only covers property damage.
  Key Takeaways:
• Short – term rental insurance costs between $1,500 – $3,000 per year on average, depending on various factors.
• Standard homeowner’s policies typically do not cover short – term rental activities.
• Factors such as replacement cost, location, property type, service provider, and extent of coverage all impact the cost of the insurance policy.
  Try our vacation rental insurance cost calculator to estimate the cost for your property.

Factors to Consider when Choosing Insurance

The short – term rental market is booming, with a 9% increase in listings and total guest capacity in 2024 globally (SEMrush 2023 Study). As more property owners turn to platforms like Airbnb and VRBO, choosing the right insurance becomes crucial. Let’s explore the key factors to keep in mind.

Coverage – related factors

Comprehensive coverage scope

A comprehensive short – term rental insurance policy should cover property damage, loss of rental income, and offer personal liability coverage. For instance, Nashville short – term rental host Brady Mills learned the hard way about the importance of comprehensive coverage. His guest threw a raging party, causing $10,000 in property damage and $2,000 – $3,000 in loss of business income. Had his policy not had a "malicious acts" exclusion, he would have been better protected.
Pro Tip: Review your policy to ensure it covers all potential risks associated with short – term rentals, including vandalism, theft, and slip – and – fall accidents.

Deductibles, additional coverage options, and policy exclusions

Choosing a higher deductible can lower your premium, but you’ll need to be prepared to cover more out – of – pocket expenses if a claim arises. Some policies also offer additional coverage options such as equipment breakdown coverage. It’s essential to understand what is excluded from your policy. For example, many standard homeowners’ insurance policies exclude home – sharing situations like Airbnb or VRBO rentals.
Comparison Table:

Aspect	Low Deductible	High Deductible
Premium	Higher	Lower
Out – of – Pocket Cost (in case of claim)	Lower	Higher

Cost – related factors

Average cost range

The cost of your short – term rental insurance depends on multiple factors such as location, property type, service provider, and extent of coverage. On average, comprehensive short – term rental insurance coverage can cost between $1,500 and $2,000 per year, according to market research. However, a typical policy may total fees from $2,000 to $3,000 per year.
ROI Calculation Example: If your property generates $50,000 in annual rental income and you pay $2,000 for insurance, your net income after insurance is $48,000. If an uninsured property incurs a $10,000 damage, the loss can significantly impact the bottom line.

Location and local regulations

Across the United States, local governments have implemented or are considering insurance requirements for short – term vacation rental operators and homeowners. For example, some areas may require a minimum liability coverage amount. It’s crucial to check the local ordinances in your area to ensure compliance.
Technical Checklist:

1. Research local insurance requirements for short – term rentals.
2. Verify if there are any specific coverage limits or types mandated.
3. Consult with local real estate or insurance professionals for guidance.

Other factors

When choosing an insurance provider, consider their reputation, customer service, and digital features. Based on Investopedia’s research into coverage offerings, customer complaints, and digital features for 12 insurance providers, Propel is the best short – term rental insurance company.
Pro Tip: Read customer reviews and ratings to gauge the quality of an insurance provider’s service.

Platform – related

Major platforms like Airbnb and VRBO offer primary liability coverage. Airbnb’s Host liability insurance provides $1 million in coverage, and Host damage protection offers $3 million in coverage. However, these platform policies have limitations and should not be a substitute for standalone vacation rental insurance.
Case Study: Some hosts are able to get around 60 to 70% of the damage amounts they claim approved, with a 11.52% higher success rate on Vrbo than on Airbnb.
Key Takeaways:

1. Look for comprehensive coverage that includes property damage, loss of income, and liability.
2. Consider the cost in relation to your property’s value and potential risks.
3. Always comply with local regulations.
4. Don’t rely solely on platform – provided insurance.
   Try our short – term rental insurance calculator to estimate your coverage needs. As recommended by InsuranceTech Tools, you can also explore alternative insurance options that are tailored to short – term rental hosts. Top – performing solutions include Propel, which offers policies with customizable coverage options.

FAQ

What is vacation rental insurance?

Vacation rental insurance is a specialized insurance designed for properties rented out on a short – term basis, typically for 30 days or less. According to industry standards, it offers coverage for property damage, loss of rental income, and personal liability. Detailed in our [Basic Components of Insurance] analysis, it safeguards against various risks associated with hosting guests.

How to file an insurance claim for an Airbnb property?

Filing an Airbnb insurance claim involves several steps. First, log in to your account. Then, select the listing if you have multiple rentals. Next, go to the Inbox and select Filters. Enter the guest’s name or reservation ID. Select the guest’s name and then go to the Damage protection section. This process is essential as seen in the case of Nashville host Brady Mills.

Airbnb’s AirCover vs standalone short – term rental insurance: What’s the difference?

Unlike standalone short – term rental insurance, Airbnb’s AirCover only provides coverage during specific Airbnb rental periods. Standalone policies can offer continuous protection regardless of rental status. AirCover has $1 million in liability and $3 million in damage protection, while standalone policies vary. Refer to our [Key Differences in Coverage] section for more details.

Steps for choosing the right vacation rental insurance?

When choosing vacation rental insurance, follow these steps: First, assess your coverage needs, including property damage, income loss, and liability. Second, compare costs from different providers, considering factors like location and property type. Third, check local regulations. Lastly, research providers’ reputations. As recommended by industry experts, proper evaluation is crucial.