Airbnb and Short-Term Rental Insurance: What Property Owners and Managers Need to Know

1. Why Does a Short-Term Rental Property Need Insurance Protection?

Short-term rentals can generate income from a property, but they also involve risks that may differ from those associated with a home used exclusively by its owner.

Frequent guest turnover, the use of electrical appliances, and the furnishings and equipment inside the property make proper maintenance and appropriate insurance coverage particularly important.

An unexpected incident may result in:

• Damage to the building or its contents.
• Damage to furniture, electrical appliances, and equipment.
• Damage to neighbouring apartments.
• Bodily injury to a guest or another third party.
• Temporary inability to rent out the property.
• Loss of income due to cancelled bookings or an inability to accommodate guests.

Insurance does not eliminate all these risks. However, it can help limit the financial consequences of specific incidents, provided they fall within the agreed coverage.

2. Does Standard Home Insurance Cover an Airbnb Property?

This is one of the most important questions to address before starting to rent out a property.

A home insurance policy may be designed for owner-occupied properties or long-term rentals and may contain specific terms governing how the property is used. Regular short-term letting may be treated differently.

For this reason, you should never assume that an existing home insurance policy automatically covers Airbnb use.

Before starting or continuing short-term rentals:

• Inform the insurance company about how the property is being used.
• Request written confirmation that this type of rental activity is accepted.
• Check whether a different policy or additional coverage is required.
• Clarify whether protection applies when the property is furnished and rented to different guests.
• Check for specific conditions relating to contents insurance or liability coverage.

Disclosing the property's actual use is important because failing to provide material information may affect the assessment of an insurance claim, depending on the policy and applicable law.

3. What Insurance Coverage Might a Short-Term Rental Property Need?

There is no single insurance package suitable for every Airbnb property. The needs of a small studio differ from those of a furnished villa with a swimming pool or a high-value apartment.

The main types of coverage worth considering are outlined below.

Building Insurance

Building insurance covers the property itself and its insured structural elements. Depending on the policy, it may include protection against:

• Fire and smoke.
• Certain types of water damage.
• Weather events.
• Earthquakes, if the relevant coverage has been selected.
• Other specified risks.

Check whether the sum insured reflects the appropriate insurable value. The cost of rebuilding a property is not necessarily the same as its market value.

Contents Insurance

In a furnished Airbnb, the equipment and furnishings represent a significant part of the investment.

Contents may include beds, sofas, tables, televisions, refrigerators, washing machines, air-conditioning units, and other items owned by the landlord.

Contents insurance may cover certain types of damage to these items, depending on the policy terms. However, it does not necessarily mean that every breakage or instance of damage caused by a guest will be compensated.

Landlord's Liability Insurance

Liability coverage can be particularly important if a guest or another third party suffers damage and makes a claim against the property owner.

For example, a claim may arise if part of the property becomes detached and injures someone, or if a water leak affects a neighbouring apartment.

Coverage depends on whether the incident falls within the insured risks and whether the conditions for the insured person's liability are met.

Loss of Rental Income Cover

Some business or property insurance policies may provide cover for loss of income following a specified insured event.

For example, if a covered fire makes the property temporarily unavailable for rental, compensation may be available subject to specific conditions.

This does not mean that every booking cancellation, vacancy, or drop in demand is covered. Check the activation requirements, waiting period, duration of cover, and method used to calculate the loss.

4. What Happens if a Guest Damages the Property?

Guest-related damage is one of the risks that concerns short-term rental owners.

Examples include a broken piece of furniture, a damaged electrical appliance, a stain on a delicate surface, or damage caused by incorrect use of equipment.

However, three different situations must be distinguished:

Normal wear and tear: Deterioration resulting from ordinary use is not necessarily treated as an insured loss.

Accidental damage: Coverage may be available only if the incident is expressly included among the insured risks.

Intentional damage: This may be treated differently from accidental damage and may be excluded under some policies.

If damage occurs, it is useful to photograph the affected area, record when the damage was discovered, retain relevant messages and receipts, and follow the procedures specified by the booking platform.

If you have an insurance policy, notify the insurer in accordance with its terms. Do not assume that a guest deposit or a platform's protection policy replaces insurance coverage.

5. Is the Protection Offered by Airbnb or Another Platform Enough?

Short-term rental platforms may offer host protection programmes or procedures for submitting compensation claims. However, these benefits should not be considered equivalent to an independent insurance policy.

The extent of protection depends on the platform's current terms, exclusions, evidence requirements, and claims procedures.

It is important to check:

• Which types of damage or claims may be submitted.
• Which items or incidents are excluded.
• What deadlines apply.
• Which supporting documents are required.
• Whether liability protection is included and under what conditions.
• Whether restrictions apply to the specific booking or use of the property.

The existence of a platform benefit does not mean that every loss will be compensated or that all the property owner's liabilities are covered.

The more prudent approach is to assess the platform's protection separately from the coverage provided by your own insurance policy, so you understand what applies in each situation.

6. How Can You Protect the Property Against Damage and Accidents?

Insurance is part of risk management, but it does not replace maintenance and preventive measures.

The following practices can help reduce the likelihood of damage:

• Regularly inspect plumbing installations and connections.
• Have electrical installations and appliances maintained by qualified professionals.
• Check locks, doors, windows, and balconies.
• Maintain air-conditioning and heating equipment appropriately.
• Install and maintain suitable fire-safety equipment in accordance with applicable requirements.
• Provide clear instructions for using appliances and installations.
• Address leaks, dampness, and other signs of damage promptly.

If the property has a swimming pool, fireplace, external stairs, or other features that may create additional risks, particular attention should be paid to maintenance and guest safety.

Preventive measures should be tailored to the specific property and the obligations applicable to its use.

7. How Can Damage Affect Financial and Tax Management?

Serious damage can affect not only the owner's property but also their cash flow.

If the property cannot be used for a period of time, the owner may continue to incur expenses for loans, common-area charges, utilities, maintenance, or other obligations, even if booking income declines.

For this reason, it is useful to maintain a financial reserve for unexpected repairs and periods without rental income. Insurance can help limit certain covered losses, but it is not a substitute for financial preparation.

At the same time, tax obligations, registration requirements, and short-term rental operating rules should be considered separately. An insurance policy does not exempt the property owner from these obligations.

For specialised tax or legal matters, it is advisable to seek guidance from an accountant or an appropriately qualified professional.

8. What Should You Check Before Choosing Airbnb Insurance?

Before signing a policy, review the following factors:

Property use: Is short-term rental activity explicitly declared? Are there restrictions on the frequency or manner of letting?

Insured property: Is only the building covered, or are the contents included as well? Are all items owned by the landlord covered?

Insured risks: Does the policy include fire, water damage, weather events, earthquakes, or other risks relevant to your property?

Liability: Is there cover for claims made by guests or other third parties? What limits and exclusions apply?

Guest-related damage: Is accidental or intentional damage covered? Are there specific conditions or restrictions?

Loss of rental income: Is cover available if the property becomes unavailable because of an insured event? How is compensation calculated?

Deductibles and limits: What portion of a loss remains your responsibility, and what is the maximum amount payable?

Claims process: Which documents are required, what deadlines apply, and when must the insurer be notified?

Answering these questions helps you compare policies meaningfully rather than relying solely on the premium.

9. Conclusion: Short-Term Rentals Require Comprehensive Risk Management

Renting out a property through Airbnb or another platform can be an important source of income, but it also involves responsibilities and potential risks.

Appropriate insurance protection starts with accurately declaring how the property is used and clearly understanding the coverage provided. Building insurance, contents insurance, liability protection, and potential loss of rental income cover address different needs and should not be assumed to be automatically combined in a single policy.

Regular maintenance, compliance with safety requirements, documentation of the property's condition, and a financial reserve for unexpected expenses are equally important.

At Globy+, our goal is to help you assess the available insurance options and choose protection that reflects the characteristics and needs of your rental business.

Important disclaimer: This article is intended for informational purposes only. Coverage, exclusions, and claim settlement conditions are determined by the insurance policy and applicable law. Protection offered by short-term rental platforms is governed by their own terms and does not automatically replace an insurance policy.