Does Homeowners Insurance Cover Your Airbnb Rental?


The last thing a parent with a child abroad wants is to be powerless and ineffective if that son or daughter is in danger. Madrid was another check off the bucket list for 19 year-old Jacob Lopez, whose home for the duration of his visit was an Airbnb rental. Innocuous enough, the posting gave no hint that his host would lock him in a room and sexually assault him. Jacob frantically sent messages to his mother as he attempted to find an escape route. His mother, an ocean away, contacted Airbnb, who refused to provide her with the address or information of the Madrid host, told her to have the Madrid police call Airbnb for the information. Phone calls to the police were repeatedly disconnected, and Airbnb was no longer picking up the phone. Jacob, fearing for his life, was eventually was able to persuade his captor to release him—but not before the damage was already done.

As in other sectors of the “sharing economy”, like VRBO and Uber, these questions are being asked and addressed over and over. Beyond safety concerns, other issues arise: Residents of Fountain Valley are finding their neighbor’s vacation rental to be a disturbance to the neighborhood’s previously peaceful atmosphere. They worry about these weekly or weekend residents and their unknown backgrounds, and the trash and noise. The city is looking into the most proactive way to work with vacation rental owners, as other destination Orange County cities have: Seal Beach prohibits short-stay rentals, while Laguna Beach requires permits.

The rise of the vacation rental has given the travel experience a makeover. Whether a boulevard apartment in Paris or a ranch home in Texas, both national and international traversals are simplified and immersive. But horror stories like Jacob’s give rise to questions of liability and insurance. Is Airbnb concerned enough with safety to provide insurance? As of now, they don’t provide coverage. However, our agency’s owner Gary Arch does offer a suggestion: “Clients should know that their regular insurance policies likely won’t cover seasonal or short-term rentals and they should talk to their agent. They should also have higher liability protection to make sure they are protected. Ask us how an umbrella insurance policy could help.”

These stories are cautionary tales to those looking to join the vacation rental community. Understand your insurance company’s policies regarding short-term rentals, your local government policy, and the risks associated with the home sharing business.

What qualifies as a short-term rental?

Generally, a short-term rental is less than thirty days. Renting out space for a one-time event should be covered under your homeowners policy, but if you take part in a home share company, or rent out more than once in a year, take a look at what other policy is right for you.

What are the risks?

What if a guest slips and falls on your stairs? Or the guest leaves a candle burning all night, starting a fire? Or your property begins to disappear along with your guests? Even the most well-maintained home, or well-behaved guest, can lead to a liability issue.

Which policies cover what?

Homeowners insurance will likely not cover any damage or theft of property; nor will it cover guest injuries or damage of their personal property. Some insurance companies will require renters to purchase a business policy; if you are renting long term (say for six months) you will need landlord coverage. A parent company, such as Airbnb, will not cover liability costs, so having the coverage you need is imperative.

Preventative measures

In order to prevent any of these problems with renters, make sure to do a thorough interview and background check of guests coming to your property.

BMR Insurance is here to help you determine and attain the coverage you need as you consider or start short-term renting. Call us now at 714.838.1911 for a free quote.

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