VELARIS
Sign In
Glossary

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.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated

Why this matters for property managers

Individual hosts buy STR insurance one home at a time. Property managers need it across a portfolio that changes daily, which is why managers move to program structures that follow inventory through the PMS instead of policies written per address.

Worked example

A manager adds twelve homes in a quarter and drops five. With one policy per home, three of the new homes are uninsured for weeks while quotes come back, and two dropped homes are still being billed. With a program synced to the PMS, coverage tracks the inventory the day it changes.

Short-term rental insurance for a portfolio, not a house

A host buys short-term rental insurance one home at a time and renews it once a year. A property manager cannot: inventory changes weekly, owners come and go, and a policy per house falls out of step with the portfolio within a month. That is why managers move to a program structure. Coverage follows the property management system, so a home is enrolled the day it is added and dropped the day it leaves; guest damage is funded by a guest fee the manager keeps, with insurance above a chosen retention; liability limits are standardized across the portfolio; and certificates of insurance come from one dashboard. Owners keep a building policy in their own name; the program supplies the layers the management company is responsible for, on every channel.

Related terms

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.
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.
Property damage coverage
Property damage coverage pays to repair or replace structures, contents, appliances, and furnishings damaged by a covered cause, including guest-caused damage. It is the insured layer that sits above a damage waiver program's retention.

Browse every term in the insurance glossary for property managers.

Short-term rental insurance: common questions

How much does short-term rental insurance cost?

Per-home commercial policies are priced on location, property value, and revenue, and vary widely. Program pricing for managers is per reservation: $9 for administration plus retained damage, with guest fees funding the damage layer.

Is STR insurance required?

Increasingly by cities as a permit condition, and almost always by owner contracts and lenders. See the state-by-state regulations guide.

Related guides

Short-term rental insurance
Read the full Velaris guide.
Vacation rental insurance
Read the full Velaris guide.
STR regulations by state
Read the full Velaris guide.

Want this explained for your portfolio?

Our team speaks plain English and knows property management. Ask us how this applies to the homes you manage.

Get a Quote