Proper’s Unique Property Entrustment Enhancement
One of the core components of every Proper Insurance policy is coverage for “property entrustment” — and it’s something you won’t find in standard Homeowners or Landlord insurance.
When you hand over the keys to paying guests, you trust your property and everything inside to complete strangers. If they steal, vandalize, intentionally or even maliciously damage your Airbnb, most policies won’t cover the loss — because the guest was invited inside.
Proper stands apart with coverage that fills this critical gap for short-term rental owners, protecting you from guest-caused damage that’s typically excluded elsewhere.
It’s not a damage deposit. It’s not a host guarantee. It’s another key component of our one-of-a-kind policy built for the risks of short-term renting.
What is a Property Entrustment Clause?
In insurance, “property entrustment” refers to a situation where the policyholder voluntarily gives possession or access of their property to someone else. While you may not find the exact term “property entrustment” listed in the exclusions section of your policy, the concept is commonly embedded in standard insurance policies including Homeowners (HO), Dwelling/Landlord (DP), and even Commercial (CP) and Business Owner (BOP) policies.
It applies when the insured voluntarily gives access or possession of their property to another party — such as a tenant, contractor, guest, employee, or business occupant.
If that person causes damage, whether theft, vandalism, accidental, intentional or malicious damage, the policy may opt to not respond because the property was entrusted to someone else.
In the eyes of the insurer, the risk shifted the moment the keys changed hands from the policyholder to a person that the policyholder allows to come and go from the property (other than an employee). The risk is now not the responsibility of the insurer but between the policyholder and the person or party they handed the keys to.
What Happens When You Hand Over the Keys?
One example: You ask your college-age sibling to house sit while you’re on vacation. They invite a group of friends over one evening for a change of scenery from campus life. Things quickly got out of hand, resulting in damage. Your insurer might deny the claim under the property entrustment exclusion because the damage didn’t happen under your care — you voluntarily gave someone else access to your home, and the resulting loss falls outside the policy’s scope.
The same policy clause applies to more formal arrangements, like a landlord-tenant relationship. In those cases, insurers expect the landlord to manage the risk themselves through a lease agreement, security deposit, the tenant’s renters insurance, and other legal means of recovery.
In short-term rentals, the risk is increased substantially with even more groups of guests coming and going from the property— and recovery options for the STR owner and Airbnb host are limited.
That’s what makes property entrustment coverage so important for short-term rental owners and Airbnb hosts— and why understanding this common clause is critical for anyone sharing their property with a constant rotation of guests, especially guests they do not know.
Why Property Entrustment is Important for Short-Term Rental Owners and Airbnb Hosts
For Airbnb hosts and short-term rental owners, the common policy clause for property entrustment creates a huge gap in coverage as most short-term rental owners only have a standard Homeowners or Landlord policy, both of which commonly contain the exclusion.
This means that if damage occurs at your property at the hands of someone you entrusted it to, the carrier of your HO or DP policy has reasoning to completely deny the claim.
Insurance carriers often deny claims under this exclusion, arguing that the property wasn’t stolen or broken into — it was entrusted by you to your guest. And once that handoff happens, many insurance carriers view the risk as yours alone with the result being same: a denied claim and a potentially massive out-of-pocket expense.
This exclusion doesn’t care about the nature of the damage that was caused either — meaning if the guests accidentally caught your deck on fire while using the outdoor grill, intentionally left a dog with separation anxiety at your no-dogs-allowed property, or even maliciously destroyed your bathroom after you refused to grant them with a late checkout, the damage claim could be denied by your carrier leaving you to front the total bill, however expensive that may be.
When developing the Proper Insurance policy in 2014, we understood property entrustment as a crucial component for comprehensively protecting short-term rental owners and Airbnb/Vrbo hosts. That’s why we include Property Entrustment coverage as a core part of our policy — because damage by guests isn’t hypothetical or rare. It’s a real risk short-term rental owners face every day.
Proper Insurance’s Enhancement for Property Entrustment
At Proper Insurance, our unique short-term rental insurance protection doesn’t just begin at the transfer of keys, it’s built to completely replace inadequate Homeowners and Landlord policies with far better coverage that fits the actual risks you face as a short-term rental owner and Airbnb host.
Our Property Entrustment enhancement is automatically included in every Proper policy and is written to extend protection from theft, vandalism, accidental, intentional, or malicious damage caused by guests during their stay at your property.
When you Hand Over the Keys to Your Airbnb
No Limit on Theft or Damage By a Guest
What About Vandalism at My Airbnb?
Examples of Guest-Caused Damage at Airbnb’s
Here are a few examples of guest-caused damage that may not be covered under a standard Homeowners or Landlord policy that has a property entrustment exclusion:
- Burglary/Theft: A guest brings a U-Haul to your property and empties out everything including furniture, tv, sounds system, linens, kitchen items, vacuum, and more.
- Vandalism: Guest decides your living room walls are the perfect canvas for a new mural for their bachelorette party leaving behind permanent paint on the walls.
- Accidental: A guest accidentally leaves the kitchen sink running, causing extensive water damage.
- Intentional: A guest intentionally breaks furniture, damages appliances, or smashes a window trying to get back inside after locking themselves out.
- Malicious: A guest maliciously destroys part of the home in retaliation after receiving a noise complaint.
Proper Insurance’s Property Entrustment Coverage in Action
Guest-caused damage isn’t rare — it’s real, expensive, and often not covered by standard insurance due to the property entrustment clause. Whether the damage is accidental, intentional, or malicious, many policies stop responding the moment you hand over the keys. Luckily for this host who did his research on the best short-term rental insurance, they had the right protection in place at the time when a guest’s “oops!” caused extensive damage to his property. Proper Insurance offers peace of mind with unique Property Entrustment coverage included in our comprehensive policy designed for the realities of short-term renting.
Proper Insurance’s Pillars of Protection Against Guest-Caused Damage
No Sub-Limit on Guest-Caused Damage.
Proper Insurance includes property entrustment coverage which provides coverage for guest-caused damages with no sub-limit, offering coverage up to your total policy limit.
Building and Contents Coverage
Proper Insurance provides coverage for damage to the building and also provides coverage for the contents inside. This includes coverage for the home as well as contents like furniture, cabinets, walls, plumbing, light fixtures, appliances, etc.
Actual Revenue During Rebuild Period
The Proper policy uniquely protects your actual business revenue during the time your property is being repaired from a covered loss.
Unmatched Coverage Strengthened by Expert Claims Handling
“I had a guest who inflicted a LOT of damage on my home. I had to close it down for 40+ days. But Proper Insurance made it easy to have the confidence of knowing they would stand by their coverage, making us whole for all the damage to our home. Our rep, Chelsey, made the whole process smooth and easy. It really gave us peace of mind in a very difficult situation. Thank you Chelsey, and thank you Proper Insurance!”
– Sharmalee L.
“My claims specialist Alayna S. was wonderful. I had claims at 2 of my short term rentals and Farmers turned them down for damage that clearly should have been covered. Fast forward I switch all my props to Proper Insurance and my first claim was quickly assessed, approved and paid out and they made the process EASY and I felt like they supported me versus Farmers trying to just get rid of me. Highly recommend Proper Insurance for all your rental properties.”
– Eric L.
Frequently Asked Questions: Guest-Caused Losses at Short-Term Rentals
What types of guest-caused damage does Proper Insurance cover?
Proper covers a wide range of damage caused by guests, including theft, vandalism, accidental damage, intentional damage, and malicious damage.
Is there a limit to how much guest-caused damage Proper will cover?
No. Unlike platform guarantees or deposits, there’s no separate cap on guest-caused damage in the Proper policy. Coverage applies up to the limits outlined in your policy for the building and contents.
What happens if my property is unrentable after guest-caused damage?
If you experience a covered cause of loss making your property uninhabitable, Proper will pay your actual lost business revenue during the time it takes to complete repairs. This business revenue protection is a unique part of our commercial-grade policy.
Is Proper Insurance the same as Airbnb’s AirCover or a security deposit?
No. AirCover is a platform guarantee with limited payouts and no contractual guarantee of reimbursement. A damage deposit may help for minor issues but won’t cover serious losses. Proper is real insurance — underwritten, regulated, and built to respond to a variety of short-term rental risks.
Does Airbnb Cover Damages?
Airbnb offers a program called AirCover, which provides limited reimbursement for host damages. However, it is not a replacement for carrying your own insurance and does not guarantee a payout. It’s a platform-based promise of which you are not a named insured, meaning no policy rights, and thus little to no contractual obligations in the coverage for you.
How Do I Claim Damage Through Airbnb’s AirCover?
To claim damage through Airbnb’s AirCover, hosts must file a request within 14 days of the guest’s checkout and often need to provide documentation, photos, receipts, and communication records. The process can be time-consuming, and reimbursement is not guaranteed. Many hosts find they’re left with partial payouts or denied claims — especially for high-value losses.
What Insurance Do I Need for Airbnb?
It’s recommended to have a commercial-grade short-term rental policy, like the one offered by Proper Insurance. It should cover building and contents damage, business liability, guest-caused losses, and revenue loss during repairs. Most importantly, it should remove the property entrustment exclusion, which is the first place where other policies fall short.
Why Do I Need Short-Term Rental Insurance?
Standard Homeowners and Landlord policies weren’t designed for short-term renting. Once you start welcoming paying guests — even occasionally — your insurance needs change. A risk-aligned short-term rental policy covers the business use of your property, guest-caused damage, liability exposures, and loss of business income, providing protection that traditional policies exclude.
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