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June 7, 2026
Short-term rental insurance fills the gap your homeowners policy leaves open when Airbnb or VRBO guests are paying to stay. Covers what AirCover actually is (not insurance), what STR policies cover, 2026 cost data from Steadily and Obie, carrier comparison, and state-by-state STR notes for PA, TX, VA, MD, OH, TN, and KY.
Most Airbnb and VRBO hosts assume their homeowners policy covers guests who pay to stay in their property. It almost certainly does not. Standard homeowners insurance policies contain a business activity exclusion that typically voids coverage when guests are paying to stay, and the liability exposure from a single guest injury lawsuit can wipe out years of Airbnb rental income in one claim. A guest who falls down the stairs and sues for $400,000 in medical bills and lost wages is not a hypothetical; it is the kind of claim that happens in short-term rental properties every week.
Dragon Insurance writes short-term rental coverage through Steadily, Obie, Openly, and Foremost across PA, TX, VA, MD, OH, TN, and KY. We shop all four carriers for STR hosts and help you understand what AirCover actually is (hint: it is not insurance), what your homeowners policy actually excludes, and how to fill the gap before a guest makes it a very expensive lesson.
Key Takeaways
Quick Answer
What is short-term rental insurance?
Short-term rental (STR) insurance is a dedicated insurance policy or endorsement designed for residential properties rented to guests for periods typically under 30 days. It covers the gaps that standard homeowners insurance excludes when paying guests are present: liability for guest injuries, physical damage to the dwelling during a rental period, loss of rental income when the property is uninhabitable after a covered loss, and medical payments for guest injuries. STR insurance can be structured as a standalone landlord-style policy (if you do not live at the property) or as a homeowners policy with a specific STR endorsement (if it is your primary residence that you rent occasionally).
This is the most common misconception Dragon encounters with Airbnb and VRBO hosts. The assumption is that because the property is your home and you have homeowners insurance, guests are covered. The policy language does not work that way. Most standard homeowners policies were designed for owner-occupied residences, not commercial hospitality operations. Renting to paying guests turns your home into a business activity, and most policies explicitly exclude or limit coverage during that activity.
| Coverage Type | Standard Homeowners Policy | STR Reality |
|---|---|---|
| Dwelling damage during rental | Often excluded when business activity is present | Guest-caused damage to walls, appliances, and fixtures may be denied |
| Guest liability (injury lawsuits) | Excluded for business activity; guests may not qualify as "residents" | A guest injury lawsuit may have no coverage under your homeowners policy |
| Loss of rental income | Not covered (no coverage for rental income in standard homeowners) | If fire makes the property uninhabitable, lost rental bookings are your loss |
| Guest medical payments | May apply to social guests but typically excludes paying guests | Medical payments for a guest who slips and falls may be denied |
Coverage exclusions vary by carrier and policy form. Review your current homeowners policy declarations and exclusion section or contact Dragon to verify what is and is not covered for your specific property and hosting arrangement.
Airbnb promotes AirCover prominently, and many hosts interpret it as insurance. It is not. AirCover is a host protection and damage reimbursement program administered by Airbnb. It is a contractual program between you and Airbnb, not an insurance policy regulated by a state insurance department.
What AirCover does: it reimburses hosts for guest-caused property damage (up to $3 million in the current program), and provides a host liability program for bodily injury and property damage claims by guests and third parties. Airbnb processes and pays these claims directly from its own funds, not through an insurance carrier.
What AirCover does not do: it does not cover loss of rental income when your property is uninhabitable after a non-guest event (fire, water damage from a burst pipe, etc.). It does not cover damage from natural disasters, wear and tear, or damage that occurred outside a confirmed Airbnb booking. Most importantly, the program's terms are set and can be changed by Airbnb at any time. Hosts who have tried to claim under AirCover after a significant guest-caused loss frequently discover the process is slower and the payout is smaller than expected. A real STR insurance policy is backed by a licensed carrier, regulated by your state insurance department, and subject to claims handling rules that protect you.
A properly structured STR insurance policy covers four core exposure areas that your homeowners policy likely leaves unprotected.
Building and dwelling coverage
Covers physical damage to the structure of your rental property from fire, windstorm, vandalism, and other covered perils. For hosts renting their primary residence, this may be structured as an endorsement on your homeowners policy. For hosts with a dedicated rental property, it is typically a landlord or STR dwelling policy.
Liability coverage
Covers your legal defense costs and any damages awarded if a guest sues you for bodily injury or property damage that occurred during their stay. Typical limits run from $500,000 to $1,000,000 per occurrence. This is the coverage AirCover cannot reliably substitute for, because a lawsuit may involve attorneys, depositions, and years of litigation that a platform program is not equipped to manage.
Loss of rental income
If a covered loss makes your property uninhabitable (fire damage, major water damage, storm damage), loss of rental income coverage pays you the revenue you would have earned from bookings during the repair period. Standard homeowners policies do not include rental income coverage for STR properties.
Guest injury and medical payments
Pays reasonable medical expenses for guests injured on your property during their stay, regardless of fault, up to the policy medical payments limit. This is distinct from liability, which only pays when you are legally responsible. Medical payments coverage provides a faster, no-fault payment for minor guest injuries and can prevent minor incidents from becoming lawsuits.
STR insurance cost depends on the property value, location, occupancy type (primary residence rented occasionally vs. dedicated STR property), and coverage limits. Below are typical annual premium ranges for Steadily and Obie, the two most active STR specialty carriers Dragon writes, across Dragon's seven states.
| Property Value | Steadily Annual Range | Obie Annual Range | Notes |
|---|---|---|---|
| Under $300K | $1,400 to $2,200/yr | $1,200 to $2,000/yr | Mid-tier markets: PA, OH, KY. Lower risk profile. |
| $300K to $600K | $2,000 to $3,000/yr | $1,800 to $3,000/yr | Typical range for PA, VA, MD, TN markets. Most common bracket. |
| $600K to $1M | $3,000 to $5,000/yr | $2,500 to $4,500/yr | Higher-value TX and VA coastal/resort markets. |
| High-cost coastal markets (FL, CA) | Up to $9,000/yr | $4,000 to $8,000/yr | Dragon does not serve FL or CA. Noted for context only. |
Ranges reflect 2026 data from Obie's published STR insurance cost research, Steadily's published pricing guidance, and Dragon's quoting experience. Actual premiums depend on property location, construction, annual rental nights, occupancy type, and coverage limits.
Dragon writes STR coverage through three dedicated STR carriers plus Foremost for specialty rental properties. Below is a comparison of the three primary carriers.
| Carrier | Best For | Standout Feature | Cost Range | AM Best (parent) |
|---|---|---|---|---|
| Steadily | Dedicated STR and landlord properties | Fast online bind, loss of rental income included, STR-specific underwriting | $1,400 to $5,000/yr | A (via reinsurer partners) |
| Obie | Landlord and STR properties, investor portfolios | Competitive pricing for multi-property hosts, broad coverage | $1,200 to $4,500/yr | A (via reinsurer partners) |
| Openly | High-value STR properties ($500K+), primary residences | Extended replacement cost, broad coverage, Berkshire Hathaway backing | $1,800 to $5,500/yr | A+ (Berkshire Hathaway) |
AirCover is not enough
Get your Airbnb or VRBO property properly insured.
Tell us your property value, state, and whether it is your primary residence or a dedicated rental. We quote Steadily, Obie, and Openly side by side so you see the real coverage and cost difference.
Short-term rental regulations vary significantly by state and municipality. Most insurance requirements for STR hosts are set at the local level, not the state level. Below is a brief overview for each of Dragon's seven states.
Pennsylvania
No statewide STR insurance requirement, but many municipalities (Pittsburgh, Philadelphia, Lancaster) require STR registration and proof of liability insurance as a condition of the registration. Dragon serves the full PA market including the Harrisburg/Camp Hill area.
Texas
Many Texas cities have adopted STR permit requirements. Austin, San Antonio, and Houston all require STR registration; Austin specifically requires liability coverage documentation. Texas STR markets include Hill Country vacation rentals and Gulf Coast beach properties, both with elevated weather risk.
Virginia
Arlington and Fairfax counties have specific STR ordinances requiring registration and in some cases insurance. Northern Virginia STR properties near DC face high demand but also strict local regulation. Dragon covers VA including Northern Virginia and the Shenandoah Valley market.
Maryland
Baltimore City requires STR registration and has specific liability insurance minimums. Ocean City and other Eastern Shore markets have active STR activity with varying local requirements. Check county and municipal ordinances before listing.
Ohio
Columbus requires STR registration for non-owner-occupied properties. Cleveland and Cincinnati have developing STR ordinance frameworks. Ohio does not mandate STR insurance at the state level, but local registration typically requires proof of liability coverage.
Tennessee
Nashville has one of the most active STR markets in Dragon's footprint and one of the most restrictive permit regimes. Nashville requires an STR permit, proof of liability insurance ($1M minimum), and limits permits in residential zones. Gatlinburg and Pigeon Forge (near Great Smoky Mountains) are also high-volume STR markets in TN.
Kentucky
Louisville has STR registration requirements with liability insurance documentation. Lexington is developing STR regulations. Kentucky does not have statewide STR mandates, but the bourbon trail and horse country tourism markets generate significant STR activity with associated coverage needs.
Immigrant families hosting STR for supplemental income: what to know
Short-term rental income is an increasingly common supplement for families in the Nepali and Bhutanese community who own homes in PA, OH, and other Dragon states. A spare room, a basement apartment, or a second property can generate meaningful income through Airbnb or VRBO. The insurance gap is often overlooked until there is an incident.
Dragon helps STR hosts understand HOA restrictions (many HOAs prohibit short-term rentals and your homeowners policy may not cover you if you are in violation), local permit requirements, and the coverage structure that actually protects you. If you are hosting guests in your primary home, an STR endorsement on your homeowners policy may be the most efficient path. If you have a dedicated rental property, a Steadily or Obie landlord policy is typically the right structure. We explain both options and quote across carriers to find the right fit. For context on long-term rental coverage, see our landlord insurance guide.
हामी नेपाली बोल्छौं. We speak Nepali.
Does homeowners insurance cover Airbnb guests?
Almost certainly not, at least not fully. Standard homeowners policies exclude business activity, and renting to paying guests is considered a business activity by most insurers. This means that if a guest is injured during their stay, or if guest-caused damage occurs to your property, your homeowners carrier may deny the claim. Some carriers offer a home-sharing endorsement that extends limited coverage to occasional short-term renters, but these endorsements typically have lower limits and still exclude dedicated STR properties. Contact Dragon to review your specific policy language.
Do I need special insurance for Airbnb?
Yes. If you are renting your home or a property to paying guests through Airbnb, VRBO, or any other platform, you need coverage beyond a standard homeowners policy. At a minimum, you need liability coverage that specifically applies to paying guests and loss of rental income coverage. A dedicated STR policy from Steadily, Obie, or Openly is the most complete solution. Some homeowners carriers offer home-sharing endorsements for hosts who rent infrequently, but these have significant limitations compared to a dedicated STR policy.
How much does short-term rental insurance cost?
In Dragon's seven states, most STR properties cost $1,200 to $3,500 per year for dedicated STR coverage through Steadily or Obie. Properties valued at $300,000 to $600,000 in mid-tier markets like Pennsylvania, Ohio, and Kentucky typically run $2,000 to $3,000 per year. Higher-value properties in Texas, Virginia, and Tennessee markets can run $3,000 to $5,000. Coastal and high-demand vacation markets run higher. The premium also depends on occupancy type, annual rental nights, and coverage limits.
What does Airbnb AirCover actually cover?
AirCover provides up to $3 million in host damage protection for guest-caused property damage, and a host liability program covering bodily injury and property damage claims by guests. It is administered by Airbnb, not an insurance carrier. AirCover does not cover: damage from natural disasters unrelated to a booking, loss of rental income when the property is uninhabitable after a non-guest event, events that occur outside a confirmed Airbnb booking, or wear and tear. The program's terms can be modified by Airbnb and the claims process is controlled by Airbnb, not regulated by your state insurance department.
Is short-term rental insurance required?
Not by state law in Dragon's seven states, but it is frequently required by local municipal STR registration programs (Nashville requires $1M liability, for example), by your HOA as a condition of the HOA agreement, by your mortgage lender if the property is financed, and by your marina or condo association if applicable. Even where it is not technically required, the liability exposure from a single guest injury claim makes dedicated STR coverage strongly advisable.
What is the best insurance for VRBO hosts?
VRBO does not offer a host protection program equivalent to Airbnb's AirCover, which makes dedicated STR insurance even more important for VRBO hosts. For VRBO hosts, Steadily and Obie are the two carriers Dragon most often recommends based on their dedicated STR underwriting, competitive pricing, and clear liability coverage for paying guests. For VRBO hosts with high-value properties, Openly's extended replacement cost coverage is worth comparing. Dragon quotes all three in one call.
Does short-term rental insurance cover guest injuries?
Yes. STR insurance policies from Steadily, Obie, and Openly include liability coverage for guest bodily injury and property damage, and typically include medical payments coverage as well. Liability coverage pays your legal defense and any judgment or settlement if a guest sues you for an injury that occurred during their stay. Medical payments coverage pays a guest's reasonable medical expenses directly, up to the policy limit, without requiring a lawsuit. Both forms of coverage are critically important and both are excluded from standard homeowners policies for paying guests.
Can I get short-term rental insurance through an independent agent?
Yes. Dragon Insurance is a licensed independent agency that writes STR coverage through Steadily, Obie, Openly, and Foremost. We quote all four with identical coverage limits so you see the real price and coverage comparison. Working with an independent agent rather than buying directly from Steadily or Obie gives you the benefit of a comparison across multiple carriers, help understanding what coverage limits are appropriate for your property, and an ongoing relationship for renewals and claims. The premium you pay is the same whether you buy directly or through us; agents are paid by the carrier at bind.
Have your property details ready: address, year built, square footage, whether it is your primary residence or a dedicated rental, and your approximate annual rental income. We quote Steadily, Obie, Openly, and Foremost in one call and help you understand which coverage structure fits your hosting arrangement. Quotes typically ready within one business day.
Visit us: 1525 Cedar Cliff Dr STE 202, Camp Hill, PA 17011
Serving PA, TX, VA, MD, OH, TN, and KY. English, Nepali, and Hindi spoken.
Landlord Insurance Guide
What landlord insurance covers for long-term rentals, and how it differs from STR coverage.
Read more
Homeowners Insurance Guide
What your homeowners policy covers, what it excludes, and how to read your declarations page.
Read more
Renters Insurance Guide
What renters insurance covers for tenants renting from a landlord or STR host.
Read more
Dragon Insurance Services LLC is a licensed independent insurance agency. Cost figures in this article reflect 2026 third-party rate data from Obie, Steadily, and Awning.com, and our agency's quoting experience across PA, TX, VA, MD, OH, TN, and KY; they are estimates, not guaranteed rates. Actual premiums vary by carrier, property value, location, construction, occupancy type, and coverage selections, and are subject to underwriting approval. References to AirCover reflect Airbnb's publicly published program terms as of the date of writing, which are subject to change at Airbnb's discretion. State and local STR registration requirements change frequently; verify current requirements with your municipality before listing. Contact us for a personalized quote.
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