Do You Airbnb Your Home? Here's Why Your Current Insurance Might Not Protect You

As short-term rentals continue to grow in popularity across platforms like Airbnb and Vrbo, more homeowners are turning their properties into income-generating assets. But here’s a critical question most hosts overlook:

Is your insurance keeping up with your rental activity?

Spoiler alert: in many cases, your standard homeowners insurance won't cover claims that arise from short-term rental guests. That gap in protection can lead to costly surprises, and in some cases, lawsuits.

Let’s break down what you need to know about short-term rental insurance, common coverage mistakes, and how to properly protect your property and income.

The Problem with Relying on HOMEOWNERS Insurance

A traditional homeowners policy is designed for owner-occupied homes used as a primary residence. Once you start renting out your property, even occasionally, you're entering commercial territory. Most standard policies exclude that kind of use.

Here’s what that means for you:

• If a guest is injured during their stay, your liability coverage might be denied.

• If your property is damaged during a booking, you may not be reimbursed.

• If you lose income due to a covered claim, you could be left with no loss-of-rents protection.

Even if you are only renting part of the home, such as a basement unit, any business use that is not disclosed to your insurance carrier can jeopardize your coverage.

5 Common Insurance Mistakes Airbnb Hosts Make

1. Assuming Airbnb’s “Host Protection” is enough
   Their program is a helpful add-on, but it is not designed to replace a comprehensive insurance policy.

2. Not telling their insurance agent about the rental
   Many homeowners do not disclose rental activity, either by accident or to avoid rate changes. But if a claim happens, that lack of disclosure can lead to denied coverage.

3. Using personal policies for investment properties
   If the home is not your primary residence, you likely need a landlord or commercial policy with specific endorsements for short-term use.

4. Overlooking business income protection
   If a water leak or fire makes your rental unavailable for weeks, are you covered for the income you would have earned?

5. Skipping umbrella coverage
   Extra liability insurance is affordable and can provide an additional one to five million dollars in protection. This is important if a guest suffers a serious injury.

What You Actually Need: Short-Term Rental Insurance

At Briteline Insurance, we offer policies tailored for short-term rental hosts. These policies usually include:

• General liability coverage up to one million dollars or more

• Protection for property damage, including guest-caused losses

• Loss of rental income if your property becomes temporarily uninhabitable

• Options for multiple properties or multi-unit listings

• Flexible coverage for hosts who rent part-time or full-time

Some of our carriers offer hybrid options that adjust based on when the property is being rented.

Local Airbnb Host in Illinois or the Midwest? We Can Help.

Whether you are hosting a lakefront cottage in Wisconsin, a city condo in Chicago, or a private guest suite in Geneva, Briteline Insurance can help you find the right protection.

Let's make sure your coverage matches your business.
Reach out today for a quote or a policy review. We work with multiple carriers and know which ones offer the right coverage for short-term rentals, including Airbnb, Vrbo, and others.