Comprehensive Guide to Vacation Rental Insurance Options for Hosts and Property Managers

Operating a vacation rental can be a rewarding venture, offering financial gains and the satisfaction of creating memorable guest experiences. But it also comes with unique risks that traditional homeowner’s insurance doesn’t cover. From accidental guest damage and slip-and-fall claims to lost income during repairs, the financial pitfalls are numerous. Understanding your vacation rental insurance options is essential for protecting your property, income, and long-term success.

This guide explores the key types of coverage, compares top providers like Proper Insurance, Safely, and Rental Guardian, and shares strategies for integrating insurance into a broader risk management and direct booking strategy.

Quick Answer: Essential Vacation Rental Insurance Types

Most hosts need a dedicated commercial short-term rental policy that includes:

Commercial General Liability — Protects against guest injuries and lawsuits.
Property Coverage — Protects the structure and contents from fire, theft, storms, or guest damage.
Loss of Income / Business Interruption — Replaces lost rental revenue when your property is uninhabitable.

⚠️ Standard homeowner’s insurance usually excludes short-term rental activity. Relying on it could leave you financially exposed.

Why Homeowner’s Insurance Isn’t Enough

Business exclusions: Most policies exclude “business activity,” which vacation rentals qualify as.
Occupancy rules: Clauses requiring owner occupancy or limiting vacancy often disqualify STRs.
Low liability limits: Guest injuries can exceed personal policy caps.
No income protection: Lost rent during repairs isn’t covered.

Key Coverage Types Every Host Should Consider

1. Commercial General Liability

Protects you from lawsuits if a guest slips on the deck or trips on stairs. Covers legal defense, settlements, and judgments.

2. Property Coverage

Protects the structure and contents against:

Fire/smoke
Storms/hail
Theft/vandalism
Guest-caused damage (often excluded in standard policies)

3. Business Interruption / Loss of Income

Covers lost rental revenue when a disaster (like a fire) shuts you down during peak season.

4. Optional Add-Ons

Ordinance or law upgrades (building codes)
Equipment breakdown (HVAC, appliances)
Cyber liability (guest data breaches)
Commercial auto (if you use a dedicated business vehicle)

Insurance + Direct Bookings: Smarter Risk Management

Insurance is vital, but so is maximizing profit and control. By saving money on OTA fees, you can reinvest in stronger coverage.

Example: BnbDirect lets you spin up a direct booking website in minutes by pasting your Airbnb URL. You save 15–20% on commissions, keep 100% of booking revenue, and own guest relationships. This extra margin can fund higher liability limits, advanced guest vetting, or loss-of-income coverage.

Direct bookings = more control + more savings = stronger protection.

Top Vacation Rental Insurance Providers

1. Proper Insurance

All-in-one commercial STR coverage (liability, property, income)
No occupancy restrictions
Covers guest damage
Highly rated for comprehensive policies
Proper Insurance

2. Safely

Embeds coverage per booking
Guest screening (criminal, eviction history)
$10k property damage + $1M liability per stay
Safely

3. InsuraGuest

Embedded digital coverage at booking
Guest injury + accidental damage
Theft of guest property
InsuraGuest

4. Rental Guardian

Damage protection for hosts
Travel insurance for guests
Integrates with PMS tools
Rental Guardian

5. CBIZ

Scalable portfolio coverage for managers
Customizable liability, property, and income
CBIZ

6. Slice Labs

On-demand, pay-per-use STR coverage
Best for occasional rentals
Slice Labs

7. American Modern

Flexible policies for vacation homes and rentals
Coverage available via agent network
American Modern

Choosing the Right Policy

Property type & location — Single home vs. portfolio, coastal vs. inland, wildfire vs. theft risk.
Rental frequency — Full-time requires full commercial policies; part-time may fit on-demand.
Guest screening — Tools like Safely + direct booking control reduce risk.
Liability limits — Aim for $1–2M coverage.
Exclusions & deductibles — Know what’s not covered.
Comparison shop — Get multiple quotes; use STR-specialized agents.

Beyond Insurance: Extra Layers of Protection

Guest vetting — Screen guests proactively, especially with direct bookings.
Clear contracts & house rules — Limit ambiguity.
Safety equipment — Smoke detectors, CO alarms, first aid kits.
Maintenance checks — Regular inspections reduce claims.
Digital backups — Store agreements, IDs, and insurance docs securely.

Final Thoughts

A vacation rental is more than a property—it’s a business. Protect it with the right insurance, smarter booking strategies, and proactive risk management. Whether you choose Proper Insurance for comprehensive coverage, Safely for per-booking protection, or Rental Guardian for integrated solutions, the key is to ensure your policy matches your operations.

And by combining insurance with direct bookings via BnbDirect, you save money, own your guest relationships, and reinvest those savings into coverage that safeguards your income, assets, and peace of mind.