The Best Short-Term Rental Insurance Companies

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If you rent out a second home or vacation property for a short length of time, you may need one of the best short-term rental insurance companies to fully cover those properties in case of damage or a liability claim.

Renting out property through short-term rental sites like Airbnb or Vrbo has become very popular in recent years, giving property owners new opportunities to generate revenue through short-term rentals. However, standard homeowners insurance typically does not extend to properties used in this fashion because a short-term rental is considered a business activity. As such, property owners may need to obtain specialized insurance for renting property on a short-term basis. Short-term rental insurance can protect against property damage caused by a guest during their stay. It can also insure belongings that are damaged or stolen by a guest. Liability coverage is typically included as well, protecting property owners from legal liability in the event that a visitor is hurt while staying on the premises.

Although short-term rental insurance may be most appealing to property owners renting out a second home or vacation property through a rental hosting site, it could also be used by landlords who own multiple properties and rent them out on a short-term basis—usually fewer than 30 days—as even the best landlord insurance is unlikely to cover short-term rentals.

A property owner’s status as either a professional landlord or a homeowner earning supplemental income by renting out a second property can determine what exactly they should consider when looking for the best renters insurance covering this type of property. A landlord may seek out more extensive coverage that mirrors landlord insurance policies. Because landlords may rely on rental payments for their primary income, for instance, they may require loss-of-use coverage in the event that a rental property is damaged and cannot be rented out for an extended period of time. A property owner renting out their vacation home during the peak season, on the other hand, may not be dependent on rental income to make ends meet, so they may not need such extensive coverage.

Finding the best short-term rental insurance requires an understanding of both what a company can offer and what a property owner needs. Every short-term rental insurance provider will have strengths and weaknesses to consider, so there isn’t a one-size-fits-all option. With that in mind, it’s important to review the best short-term rental insurance companies available and see what each one brings to the table for property owners.

BEST OVERALL: Proper Insurance
BEST ONLINE EXPERIENCE: Safely
BEST CLAIMS PROCESS: Allstate
BEST EXTENDED POLICIES: CBIZ
BEST FOR LANDLORDS: Steadily

The Best Mortgage Protection Insurance Options — Photo: istockphoto.com

What to Consider When Choosing One of the Best Short-Term Rental Insurance Companies

When looking for the best short-term rental insurance, it’s important to match the provider’s capabilities and strengths to one’s circumstances. Some insurance companies specialize in this type of insurance, while others offer it as a rider or endorsement that can be added to an existing homeowners insurance policy. Either approach could be convenient for property owners, depending on whether they want a stand-alone policy or would rather work with their current homeowners insurance provider.

Property owners should consider a provider’s coverage area, as not all insurance companies will offer short-term rental insurance in every part of the country. Coverage amount and policy terms are important factors to weigh as well because they directly affect what an insurance policy will actually cover. Whether a property owner is considering homeowners insurance or landlord insurance, deductibles and premiums will always be significant financial concerns to think about since they impact the total cost of coverage.

Coverage Area

Arguably the first consideration that a property owner should weigh when searching for the best insurance for rental properties is coverage area. After all, if an insurance provider doesn’t offer short-term rental insurance in the property’s location, then property owners won’t be able to use that company’s services, no matter how good they are.

Coverage area can be a tricky subject when it comes to insurance because while some providers may operate across the entire country, they may not offer every form of insurance—including short-term rental insurance—to each state. Even providers that do offer short-term rental insurance in every state may limit its availability to specific ZIP codes. The reason for this is that companies may be hesitant to insure properties located in areas that are at a higher risk for catastrophic events like hurricanes or earthquakes. Excluded areas could include certain coastal regions, which property owners may consider to be the best places for short-term rentals. As such, when reviewing the best insurance companies for rental properties, always be sure to check that the rental property’s exact location is included in each provider’s coverage area.

Insurance Policy Type

Property owners on the hunt for the best short-term rental insurance have two policy types to choose from: stand-alone and add-on policies. Many large providers offer some form of short-term rental insurance as an endorsement to an existing homeowners insurance policy. Obtaining coverage through their current insurance provider could simplify matters for property owners while also opening up potential opportunities to bundle multiple policies together.

On the other hand, there are several insurance providers in this space that offer short-term rental insurance as a stand-alone policy. This setup allows property owners to take a best-in-class approach to their insurance needs, picking the best homeowners insurance for their primary residence and a separate short-term rental insurance policy for their rental property. In many cases, insurance companies that offer short-term rental coverage as a stand-alone policy specialize in this type of insurance, which can lead to extensive policy options, knowledgeable customer support, and streamlined quote and claims processes.

Coverage Amount

When reviewing different short-term rental insurance options, it’s always wise to pay close attention to the coverage amount that’s available—either with a baseline policy or as part of extended coverage terms. A policy’s coverage amount is the maximum payout that a policyholder could receive upon filing a claim. Some providers may offer a set coverage amount for every policy, regardless of their particular details or terms. Others give customers different coverage amounts to choose from, depending on how much insurance they need.

Another factor to consider is whether the coverage amount reflects the total coverage available in a given year or whether it covers each individual rental period. Companies that cover separate rental periods often offer lower coverage amounts, which could mean that policyholders are unable to recoup the full replacement value or repair costs resulting from any losses they suffer in certain situations. For instance, if a guest causes damage to the property that exceeds the per-rental-period coverage amount, the policyholder may only receive the maximum amount listed in their policy, which may be less than the annual coverage amount offered by another insurance provider.

Quote Process

The first step to finding the best rental property insurance company for any property owner is to start gathering quotes. There are a few ways for prospective customers to receive quotes on short-term rental insurance: online, over the phone, or through an agent. That being said, this particular area of the insurance industry can be somewhat limiting in terms of how many options each provider offers. Some may only support online quotes, while others require customers to speak to a representative over the phone. In other cases, site visitors can start a quote online but will need to call a representative to finalize their quote. In-person agent support appears to be somewhat less common in this space compared with other types of insurance—that is, unless a customer chooses to work with a larger insurance provider.

Claims Process

While it may be tempting to choose a short-term rental insurance provider based on financial considerations alone, it’s important to also factor in the claims process when making this decision. Filing a claim can be very stressful, especially if the damage impacts rental operations. Policyholders could be out both the cost of repairs and any time needed to bring the rental space back to its original condition—during which the property cannot be rented out. As such, a streamlined and speedy claims process is ideal. Policyholders may be able to file a claim online, over the phone, via email, or in some cases, through a mobile app or agent. It’s important to consider which approach meets a property owner’s needs; some people may prefer to file a claim completely online, while others may want more hands-on support and guidance speaking directly to an agent.

Additional Policy Endorsements and Add-Ons

Many insurance companies offer standard short-term rental insurance policies that cover common perils such as property damage and fire, in addition to liability coverage in the event that a guest is injured during their stay. In some cases, policyholders may be able to extend coverage via add-on policy endorsements. For instance, property owners may have the option to purchase additional coverage for hot tubs, swimming pools, saunas, ATVs, watercraft, and other amenities available for guests to use during their stay. These kinds of add-on policy endorsements can provide more financial security if a guest is injured or causes damage while using these amenities, as well as offer some much-needed peace of mind for property owners.

Deductibles

Insurance companies don’t shoulder repair or replacement costs on their own. Policyholders typically have a deductible that will need to be paid on any approved claim. Once the policyholder pays the deductible, the provider will then cover the remaining cost to repair damages or replace lost, stolen, or damaged possessions. Some insurance companies may offer a $0 deductible option, which means policyholders won’t be asked to pay anything out of pocket when filing a claim and recouping their losses. There is a trade-off to consider, though: Companies typically charge higher rates on $0 deductible policies, so property owners may pay more up front while potentially saving money later on if they file a claim.

Premiums

Policyholders pay insurance premiums to keep their policy active and to continue receiving insurance coverage. In other words, insurance premiums are the required costs to insure rental properties and their contents. In many cases, policyholders will pay an annual premium to receive coverage, but some providers may offer monthly premiums as an alternative.

Insurance premiums can vary depending on the exact terms selected by a policyholder. A higher coverage amount, for instance, will lead to a higher premium. Extending coverage through add-on policies will also likely raise a policyholder’s insurance premiums. Insurance companies may also charge higher rates for properties located in areas that face a greater risk of covered events such as inclement weather or burglaries.

AM Best Rating

At first glance, a company’s financial standing may not seem like the most important factor to consider when selecting the best short-term rental insurance provider, but keep in mind that insurance is a financial service. Customers should feel confident that their insurance provider has the capital to pay out any filed claims and that the organization is on stable financial footing. AM Best is a respected credit rating agency that specializes in the insurance industry. The company reviews insurance companies and underwriters, closely analyzing their financial strength and creditworthiness to determine their financial health and outlook. AM Best assigns a rating for each company it reviews, ranging from A+ for organizations with “superior” financial standing to D for those with a “poor” financial situation.

Our Top Picks

When reviewing the best insurance companies for rental properties, property owners should look for providers that can offer an expansive coverage area, numerous policy options, a generous coverage amount, and streamlined quote and claims processes, among other factors.

Best Overall

Proper Insurance

Coverage area: 50 states and Washington, D.C.
Insurance policy type: Stand-alone
Coverage amount: $1 million
Quote process: Phone
Claims process: Phone
AM Best rating: A

Pros

Specialty in short-term rental insurance
$0 deductible option
Loss-of-use coverage built into every policy
Wide selection of add-on policy options available

Cons

Quotes cannot be fully completed online

Why It Made the Cut: Proper Insurance specializes in short-term rental insurance, tailoring each policy to the needs of policyholders who own these types of rental properties. Proper Insurance’s main area of expertise is short-term rental insurance, so customers can rest easy knowing that any claim they file will be properly handled. As Vrbo’s recommended short-term rental insurance provider, Proper Insurance offers peace of mind that customers are getting the right kind of insurance for their needs. For instance, loss of use is built into every insurance policy, so property owners could receive funds to cover rental payment losses if their property cannot be used for an extended period of time following a covered event. While customers will need to eventually speak to a representative over the phone to finalize a quote, they can provide all the necessary information online first to move things forward and minimize any back-and-forth over the phone. Proper Insurance also offers a wealth of policy options to choose from, including bed bug removal, watercraft coverage, and $0 deductible options. With more opportunities to customize their policy, property owners can tailor their coverage to their exact specifications and get precisely the insurance they need.

Best Online Experience

Safely

Coverage area: 50 states and Washington, D.C.
Insurance policy type: Stand-alone
Coverage amount: Up to $1 million
Quote process: Online, phone
Claims process: Online
AM Best rating: Unknown

Pros

Specialty in short-term rental insurance and guest screening
$0 deductible option
Convenient, user-friendly online quote process
User-friendly online customer portal to conveniently manage claims
Option to conduct guest background checks upon booking

Cons

Short-term rental insurance may not be available in every ZIP code serviced by Safely
Weather-related damage not covered
Unknown AM Best rating

Why It Made the Cut: Safely Insurance provides an intuitive and user-friendly online experience from quote to claims, along with a wholly unique guest-screening service. With a heavy focus on online tools and support, Safely Insurance stands out with its ability to meet customer needs via digital platforms. That support begins with a streamlined-yet-detailed online quote process that allows customers to customize their quote with various deductibles, policy add-ons, and policy options. Although Safely’s AM Best rating is unknown, the company focuses specifically on short-term rental insurance, so this type of insurance is a core competency and area of expertise for the provider. While weather-related perils are not included in Safely’s short-term rental coverage, the company does offer guest-screening services with every policy, which may offer added peace of mind for property owners renting out their property to a wide variety of guests and visitors. Safely can even conduct background checks before a reservation is completed to determine if a guest is a potential risk to cause property damage, steal possessions, or commit a crime, providing an even greater sense of security. Safely may not always serve every ZIP code in its coverage area, but eligible customers will be able to conveniently file and manage insurance claims directly through a dedicated online portal. In addition, Safely offers $0 deductible options, so policyholders can set up the terms of their policy to best meet their financial needs.

Best Claims Process

Allstate

Coverage area: Varies by state
Insurance policy type: Endorsement
Coverage amount: $10,000 per rental period
Quote process: Phone, agent
Claims process: Online, app, phone, agent
AM Best rating: A+

Pros

Convenient claims process via mobile app
Potential to avoid rate increases following a claim
A+ AM Best rating

Cons

Short-term rental insurance may not be available in all states serviced by Allstate
Short-term rental coverage unavailable as a stand-alone policy

Why It Made the Cut: Allstate is a great option for property owners who prioritize a convenient claims process and strong financial stability in a short-term rental insurance provider. As one of the largest insurance companies in the nation, Allstate has many resources at its disposal, which can directly benefit its customers. For instance, the company has a dedicated mobile app that allows customers to manage different aspects of their short-term rental insurance policy, including filing and tracking claims so they can easily see the status of a claim at any time. Allstate also has a large presence across the country, and while it doesn’t provide short-term rental insurance to every state in its service area, customers may feel a greater sense of financial security knowing that the company has an A+ rating from AM Best—the highest rating possible. The company offers short-term rental insurance as an endorsement rather than a stand-alone policy. This may be more convenient for existing Allstate customers or property owners looking to change their homeowners insurance provider, since they can handle all of their insurance needs with a single provider. Policyholders could also benefit financially from Allstate’s ClaimGuard feature. With ClaimGuard, customers who file no more than one claim within a 5-year period will not experience a rate increase, so they may be able to keep their premiums down.

Best Extended Policies

CBIZ

Coverage area: 50 states and Washington, D.C.
Insurance policy type: Stand-alone
Coverage amount: $1 million
Quote process: Online
Claims process: Phone, email
AM Best rating: A+

Pros

Thorough and customizable online quote process
Extremely wide selection of add-on policy options available
Extensive separate-structure coverage available
A+ AM Best rating

Cons

Short-term rental insurance may not be available in all ZIP codes serviced by CBIZ
Quotes cannot be completed over the phone
Somewhat unresponsive customer support

Why It Made the Cut: CBIZ offers plenty of additional policy options to choose from, making it a top choice for property owners who want more than basic coverage with their short-term rental insurance. CBIZ has a long-standing history providing short-term rental insurance to property owners, but what really makes the company stand out is the sheer number of add-on policy options that customers can use to extend their coverage according to whatever insurance needs they have. Additional policies can cover a wide variety of amenities that property owners may use to entertain guests, including trampolines, ATVs, and even ziplines. It’s worth noting that while short-term rental insurance may not be available through CBIZ in all ZIP codes, the company’s coverage area includes all 50 states and Washington, D.C. The company’s customer support can be somewhat unresponsive at times, but CBIZ has a sterling financial reputation, which is reflected by its A+ rating from AM Best, so customers can feel confident in the company’s ability to continue providing insurance and paying out claims. Although customers are not able to receive a quote over the phone, if they go to the CBIZ website, they will find a highly customizable online quote process that allows them to craft their quote and policy around their exact specifications. This way, they can get the right amount and right type of insurance to meet all of their needs as property owners renting out their property on a short-term basis. During the quote process, policyholders can also choose to expand coverage to cover every structure on the property, including gazebos, barns, and detached garages, so coverage isn’t limited to the main residence alone.

The Best Short-Term Rental Insurance Companies