If you rent a property on Airbnb or VRBO, you're running a commercial lodging operation out of residential real estate — and your insurance probably doesn't know that. Two assumptions get short-term-rental hosts in trouble: that a homeowners or dwelling-fire policy covers it, and that the platform's host guarantee is insurance. Neither is reliably true.
Why your standard policy likely excludes it
Standard homeowners and dwelling-fire forms are written for either owner-occupancy or conventional long-term tenancy. Transient, commercial rental use — paying guests for a few nights — is commonly excluded or restricted. So a guest injury, or a fire during a booking, can be denied precisely because the property was being used as a short-term rental. The cheaper the form, the more likely the exclusion.
What platform "host protection" actually is
Airbnb and VRBO offer host guarantees and liability programs, and they're better than nothing — but they're not a substitute for your own policy. They typically come with conditions, exclusions, claim caps, and a process that puts you second in line. They generally don't cover gaps between bookings, your own contents fully, or every liability scenario. Treat them as a backstop, not your coverage.
What a real STR policy covers
A purpose-built short-term rental policy is written to permit transient use and covers what a host actually faces:
- Guest liability — injuries to paying guests, the exposure homeowners excludes for rental use.
- Business income — lost booking revenue when a covered loss takes the unit offline.
- Contents and furnishings — STRs are furnished; that furniture is yours and at risk.
- Damage from guests — subject to terms, where a residential form would balk.
The NJ angle
New Jersey's STR market clusters at the shore and in the Sussex County lake communities, both of which add wind/flood or seasonal-occupancy considerations on top of the transient-use issue. Many shore towns also have registration and inspection rules. We place STRs with carriers that want the use and flag where local ordinances intersect with the policy.