Yes, short-term rentals are active income-generating businesses and can, therefore, be excluded from coverage in traditional home insurance due to “business activity” exclusions commonly found in those policies.

In the insurance world, a property rented for less than 30 days at a time is typically considered short-term. If a property is rented for longer than 30 days to one guest or group, it would be considered a mid-term rental.  Mid-term rentals have their own unique challenges that can also be accommodated by the Proper Insurance policy. 

All Homeowners policies carry a “business activity exclusion.” In other words, any claim involving “business activity” (like renting your property to paying guests) could rightfully be denied.  Additionally, if the property is not your primary residence, you absolutely have the wrong insurance and we strongly encourage you to call an insurance agent, share your Airbnb listing, and explain that this is not your primary residence.

Even Home-Sharing Endorsements were designed and written for owner-occupied primary residences and provide minimal coverage enhancements (such as only $2,500 in contents coverage). These policies are not designed for a secondary short-term rental investment property where the owner does not live on-site. For a regularly rented property, you need business insurance like Proper’s unique Commercial Homeowners policy.

Dwelling/Landlord insurance may not provide adequate coverage for the unique risks associated with short-term rentals as it was primarily designed for long-term rental properties. Short-term rentals face specific challenges and exposures, such as higher guest turnover, which can lead to increased risk of property damage or liability claims. A Dwelling/Landlord insurance policy will offer some level of protection, but there are gaps present in areas crucial for short-term rental operations.

Insurance agents and brokers work hard to guide clients through complex policies, but short-term rentals don’t fit neatly into traditional insurance categories. It’s easiest for them to sell the policies they are most familiar with like a Homeowners or Landlord policy but when those policies are applied to short-term rentals, coverage gaps can appear simply because the policy was never designed for that type of risk. 

This is where specialization matters. Proper Insurance focuses exclusively on short-term rentals. A coverage review with a Proper Super Agent can help clarify what your current policy actually responds to, where gaps may exist, and offer coverage that aligns with the real risks of short-term renting.