Short-Term Rental Insurance 101 with Proper Insurance (Episode 435)

Short-Term Rental Insurance 101: What Every Host Needs to Know

When it comes to protecting your short-term rental, insurance is one of the most critical (yet overlooked) aspects of hosting. Many property owners assume their standard homeowners policy has them covered—only to find out the hard way that it doesn’t. In this episode of Thanks for Visiting, we’re joined by Nick Massey, Chief Sales Officer at Proper Insurance, to break down the essentials of short-term rental insurance and how to ensure your business is fully protected.

Why Short-Term Rental Hosts Need Specialized Insurance

Hosting on Airbnb or Vrbo is different from traditional homeownership or long-term rentals. While platforms may advertise built-in “coverage,” it’s important to understand the limitations. Unlike a personal homeowner’s policy, short-term rental insurance is designed for the unique risks that come with frequent guest turnover, liability concerns, and business-related losses.

Nick emphasizes that relying solely on platform-provided protections—like Airbnb’s AirCover—is risky. These programs are not insurance policies, meaning hosts don’t have direct policyholder rights. Without a dedicated short-term rental policy, you could be left without coverage when you need it most.

Common Claims & Risks in Short-Term Rentals

One of the biggest mistakes hosts make is underestimating how often claims actually happen. According to Proper’s data, short-term rental properties are nearly twice as likely to experience a claim compared to a primary residence. The top three claims in the industry are:

  1. Water Damage – Frozen pipes, leaks, and plumbing failures are the #1 cause of insurance claims. Many standard policies cap water damage coverage, leaving hosts with unexpected repair bills.
  2. Wind & Storm Damage – Whether it’s hurricanes, tornadoes, or falling trees, storm-related damage is common, and some platform protections exclude natural disasters altogether.
  3. Guest-Caused Damage – Accidental or intentional, guests can cause costly damage. Proper Insurance covers guest-caused damage, unlike many traditional home policies.

What Standard Homeowners Insurance Won’t Cover

Many hosts assume their homeowners or landlord insurance policy is enough—but most of these policies include business activity exclusions that deny claims related to short-term rental operations. Nick breaks down the key differences between policy types:

  • Homeowners Insurance – Designed for primary residences; excludes coverage for rental-related claims.
  • Landlord Insurance – Covers long-term rentals, but not short-term guest turnover, business liability, or loss of rental income.
  • Commercial STR Insurance – Specifically built for short-term rentals, covering guest stays, business liability, income loss, and property damage.

If a guest gets injured at your property, a standard homeowner’s policy won’t protect you—and if you have the wrong coverage, your insurer could deny your claim entirely.

How to Protect Your Income & Business

Short-term rentals aren’t just properties—they’re businesses. That’s why income protection is so important. Nick shares a real-life case study of a host whose property suffered over $100,000 in damages. Airbnb’s AirCover initially denied the claim since it happened after the guest’s stay ended. Proper Insurance was able to step in and fully cover the damages, including the lost income from being unable to rent during repairs.

Most homeowner and landlord policies don’t provide loss-of-income coverage. Without this, a single claim could wipe out months of revenue.

Are Your Amenities Covered?

Many high-performing short-term rentals feature amenities like pools, hot tubs, kayaks, and bicycles—but these can come with hidden insurance risks.

Proper Insurance evaluates your entire property listing, ensuring:

  • Pools and hot tubs are properly fenced and meet local safety codes
  • Kayaks, canoes, and bicycles come with liability waivers
  • High-risk amenities like trampolines, zip lines, and diving boards are disclosed (or avoided)

Nick emphasizes the importance of being transparent with your insurance provider. If an amenity isn’t properly covered and a guest gets injured, you could be held liable.

Co-Hosting, Arbitrage, and Property Management Considerations

If you co-host, manage properties, or operate a rental arbitrage business, you have additional risk factors to consider.

  • Co-Hosts & Property Managers – Need to be added as additional insured on the homeowner’s policy. If you’re managing multiple properties, a general liability policy may be necessary.
  • Rental Arbitrage Hosts – Need a unique policy since they don’t own the property. Proper Insurance offers specialized commercial renter’s insurance for arbitrage operators.
  • Long-Term vs. Short-Term Rentals – If a tenant stays longer than 30 days, different legal and insurance requirements may apply.

How to Proactively Reduce Risk

Insurance isn’t just about filing claims—it’s about preventing them. Nick shares the importance of:

  • Routine safety inspections – Identifying risks before they become claims
  • Test stays – Having friends or family stay at your property to spot hazards
  • House rules & disclaimers – Making sure guests understand safety expectations
  • Breezeway’s Safety Program – Implementing checklists for pools, fire safety, and amenities

Final Thoughts: Don’t Wait Until It’s Too Late

Most hosts don’t think about insurance until they need it—but by then, it’s too late. Take the time to review your policy, understand your coverage, and make sure your short-term rental business is fully protected.

Download a transcript of this episode.

Resources:

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@dahlonegaestate

Welcome to Dahlonega Estate, a modern luxury property nestled in the heart of North Georgia wine country. Situated on 13 private acres, this stunning home features 6 bedrooms, 5.5 bathrooms, and room for 16 guests, making it the perfect getaway for family and friends. Enjoy breathtaking mountain views, a chef’s kitchen, and a terrace-level game room with a neon kids’ cave. Outside, unwind in the hot tub, relax by the firepits, or take in the fresh mountain air from the deck. Stay connected by joining their email list for exclusive updates, and follow @dahlonegaestate for inspiration for your next getaway!

We would love to feature YOU! Submit your property for our next #STRShareSunday at strshare.com.

Together, Annette & Sarah are the dynamic duo behind the wildly popular podcast Thanks For Visiting, co-creators of the Hosting Business Mastery Method, & seasoned short-term-rental hosts.

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