If you rent out a home or apartment in the United States—including its territories like Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa—you’re exposed to unique risks that a standard homeowners policy might not cover.
Anyone who leases out a property—whether occasionally through platforms like Airbnb or VRBO, or on a long-term basis to a single tenant—needs to consider coverage beyond what typical homeowners insurance offers.
What Is the Difference Between Homeowners Insurance and Rental Property Insurance?
- Homeowners Insurance: Designed primarily for owner-occupied properties. It protects against common risks like fire, theft, and liability claims arising from personal use, but it usually does not cover tenant-related incidents over extended periods.
- Rental Property Insurance: Provides coverage specifically tailored for properties that are leased out to tenants. It often includes protections for liability claims related to tenant injuries, property damage caused by tenants, and sometimes lost rental income if the property becomes uninhabitable due to a covered event.
When does homeowners insurance suffice? If you’re renting out your home for a very short period (e.g., a few days or weeks on rare occasions), some insurers may allow you to extend or modify your existing homeowners policy. However, if you rent out more frequently or for longer durations, you’ll typically need a more robust form of coverage.
Why Does Rental Duration Matter?
- Long-Term Rental: Generally defined as renting for six months or longer. If you rent out an investment property, vacation home, or even your primary residence for most of the year, you face additional risks—tenant-related liability, property damage, and potential loss of rental income if the property is compromised.
- Frequent Short-Term Rental: If you routinely rent out rooms or an entire property for days or weeks at a time (e.g., through online booking platforms), your property might be considered a commercial business. In many cases, homeowners insurance won’t cover these risks, and standard long-term rental policies may specifically exclude them.
When Is a Rental Considered “Long-Term” in Insurance Terms?
- Definition: As of March 2025, most insurance carriers still consider six months or more as “long-term.”
- Coverage Needed: A dedicated rental dwelling policy or landlord insurance policy that addresses liability from tenants and their visitors, as well as potential property damage.
- Why It Matters: Tenants living on your property increase your exposure to legal and financial risks—standard homeowners insurance might deny claims if the property isn’t owner-occupied.
What About Frequent Short-Term Rentals?
- Business Exposure: Renting to multiple guests throughout the year can be deemed a commercial activity. When that happens, you may need commercial property and liability insurance.
- Vacation Rental Insurance: Some insurers offer “vacation rental” policies specifically designed for short-term renting. These policies often include:
- Liability coverage tailored for short-term guests.
- Property damage protection that goes beyond what homeowners or standard landlord policies cover.
- Special endorsements (e.g., bed bug or identity theft coverage) that cater to short-term rentals.
- Platform-Provided Protection: Services like Airbnb may offer limited coverage (e.g., the Host Guarantee), but these policies often have strict limitations and time windows for filing a claim.
How Does Airbnb’s Host Guarantee Differ from Traditional Insurance?
- Coverage Limit: Up to $1 million in property damage protection, but it excludes various items and scenarios that standard landlord or vacation rental insurance might cover.
- Time-Sensitive Claims: You must file within 14 days or before the next guest checks in, whichever is earlier. This short window can complicate reimbursement.
- Why Supplement with Private Insurance? Private policies generally offer broader protection, fewer exclusions, and more flexibility in claim filing.
Which Policy Is Right for You?
- Long-Term Leasing: Look into rental property (landlord) insurance if you rent out for months at a time. This covers tenant-related liability, structural damage, and sometimes lost rental income.
- Short-Term or Frequent Rentals: Investigate commercial insurance or specialized vacation rental insurance if your property functions more like a hospitality business.
- Occasional or Seasonal Rentals: Contact your insurance provider to see if you can add a short-term rental endorsement to your homeowners policy.
- Mixed Use: If you rent part of the year but occupy the home otherwise, you may need both personal and commercial endorsements.
Where Can You Turn for More Information?
- Speak with a licensed insurance agent who understands both residential and commercial policies.
- Inquire about specialized products if you regularly host short-term guests.
- Review your existing coverage annually or whenever your rental situation changes (e.g., switching from long-term to short-term rentals).
