How to Protect Your Short-term Rental Investment

Operating a short-term rental (STR) can be lucrative, but it also comes with risks that traditional insurance policies aren’t designed to cover. If you’re relying on standard policies, you may have significant coverage gaps.

Here’s what every short-term rental owner needs to know about protecting their property, income, and guests.

How Standard Policies Fall Short

Many short-term rental owners assume that existing insurance — whether homeowners, landlord, or platform-provided coverage — will adequately protect their property and income. Unfortunately, each has significant gaps that leave hosts exposed.

Homeowners Insurance Gaps

Homeowners insurance is designed for owner-occupied residences, not properties rented to paying guests. Renting your home, even occasionally, effectively turns your property into a business, and most homeowners policies exclude business activity. Standard clauses like “care, custody, and control” exclusions can leave you on the hook for damage caused by guests, and failing to disclose STR activity may result in coverage denials or even policy cancellation.

Landlord Policy Gaps

Landlord policies are not a perfect solution either. They’re built for long-term leases with single tenants and assume security deposits and lease contracts provide primary recourse. These policies often don’t reimburse business income beyond fair rental value and limit liability coverage to on-premise incidents. High turnover, off-premises amenities, and varied guest behavior create exposures that landlord policies aren’t designed to handle.

AirCover Gaps

Even Airbnb’s AirCover, which combines host liability and damage protection, isn’t a full substitute for traditional insurance. It’s a guarantee, not an insurance contract, with no legal obligations or policyholder rights. Coverage only applies to Airbnb bookings, and hosts must attempt to collect from guests first. Many common risks — including liability for guest amenities, business income loss, and certain types of property damage — are excluded.

Ultimately, relying solely on homeowners, landlord, or platform protections leaves short-term rental owners with significant gaps in coverage. To ensure comprehensive protection, securing short-term rental insurance is key.

Key Features of an Effective Short-term Rental Insurance Policy

Short-term rental owners need policies that combine elements of homeowners, landlord, and commercial insurance. Look for coverage that addresses both property and business risks.

Essential elements include:

• Special form (all-risk) coverage: Protects against most causes of loss, unless specifically excluded.
• Replacement cost valuation: Ensures damaged property is replaced with new, comparable items without depreciation.
• Guest-caused damage protection: Covers accidental or malicious damage caused by a guest.
• Lost business revenue: Reimburses lost rental income during repairs.
• Commercial general liability (CGL): Covers bodily injury and property damage claims related to your rental operations — on or off premises.
• Liquor liability: Covers injuries involving features like pools, fireplaces, stairs, decks, docks, and more.
• Optional add-ons: Coverage for unexpected risks, such as equipment breakdowns, ordinance and law issues, bed bugs, and squatters.

STR insurance is designed specifically to address the realities of ST ownership: unpredictable guests, high turnover, and income reliance.

Reevaluate Your Coverage With CBIZ

Owning a short-term rental can be both rewarding and profitable, but it also exposes you to risks that standard insurance doesn’t cover. If you’re relying solely on homeowners insurance, a landlord policy, or AirCover, now is the time to reassess your protection. 

At CBIZ, we believe short-term rental owners need more than band-aid solutions, vague promises, and disjointed coverage. With more than 15 years of experience insuring vacation rentals, our team understands your business model and is prepared to stand behind you when it matters most.

Protect your property with exceptional insurance built for exceptional hosts. Connect with a licensed vacation rental insurance specialist today to receive a personalized quote.

Want to learn more about short-term rental insurance? Access our comprehensive resource, The Short-Term Rental Owner’s Guide to Insurance.