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Glossary

Homeowners policy

A homeowners policy is standard residential insurance for an owner-occupied home. Most homeowners policies exclude commercial activity, so they do not cover claims arising from short-term rentals — one of the largest coverage gaps in the vacation rental industry.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated

Why this matters for property managers

Owners routinely hand managers a homeowners declarations page as proof of coverage. It proves the wrong thing. A program that covers the home for guest liability regardless of the owner's policy protects the manager from the moment the owner's carrier denies a claim.

Related terms

Exclusion
An exclusion is something a policy specifically does not cover. Common exclusions include flood, earthquake, intentional damage, wear and tear, and — in most homeowners policies — commercial short-term rental activity.
Short-term rental insurance
Short-term rental insurance is commercial coverage for properties rented nightly or weekly through Airbnb, Vrbo, or direct booking. It covers the risks homeowners and landlord policies exclude: guest liability, guest-caused damage, and lost booking revenue.
General liability
General liability covers third-party bodily injury and property damage claims. If a guest trips on a loose step and breaks an arm, general liability pays the medical bills and defends any lawsuit.
Business interruption insurance
Business interruption insurance replaces lost revenue when a covered event — fire, storm, major damage — takes a property offline. For property managers it covers the rental income lost while a home is repaired, and can extend to the manager's commissions on that income.

Browse every term in the insurance glossary for property managers.

Homeowners policy: common questions

Will my insurer cancel my homeowners policy if I rent on Airbnb?

Some carriers do. Others deny the claim and non-renew. Either way, undisclosed rental activity can void coverage retroactively.

What replaces a homeowners policy for a vacation rental?

A commercial short-term rental policy, or a landlord policy with a short-term rental endorsement. For managed homes, portfolio programs cover liability and guest damage at the program level.

Related guides

Vacation rental insurance
Read the full Velaris guide.
Short-term rental insurance
Read the full Velaris guide.

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