STR insurance explained: homeowners vs AirCover vs dedicated STR policies

Category: Getting Started

By: Ingrid Svensson

Posted: 2025-12-04T03:59:56.047Z

I'm confused about insurance for my Airbnb. I currently have: - Standard homeowners insurance (State Farm) - Airbnb's AirCover program My neighbor (also a host) says this isn't enough and I need dedicated STR insurance. But that's another $800-1500/year on top of everything else. Can someone break down: 1. What does homeowners insurance actually cover when hosting? 2. What does AirCover actually cover? 3. When do you NEED dedicated STR insurance? 4. Which STR insurance providers are best? I have one property in a suburban neighborhood, hosting about 20 guests per month.

Reply by Kevin O'Brien:

Great question and your neighbor is right — you probably need better coverage. Let me be real about each option because there's a lot of misinformation out there. Your standard homeowners insurance (State Farm, Allstate, whatever) almost certainly has a "business activity" or "commercial use" exclusion buried in there. STR is a business. So if a guest slips on your stairs and sues you, State Farm is very likely going to say "not our problem." Scary right? Some carriers will straight up cancel your policy if they find out you're doing STR without telling them. Airbnb's AirCover looks great in the marketing materials — $3M property damage, guest liability, etc. But here's what they don't advertise: it's not real insurance. It's Airbnb's internal claims program where Airbnb is both the insurer and the judge. Tons of hosts report denied claims, lowball settlements, and months-long processing. Also doesn't cover VRBO or direct bookings at all. Dedicated STR insurance is actual insurance with real adjusters and enforceable policy terms. The big three: - Proper Insurance (https://properinsurance.com) — most comprehensive, runs about $1,200-2,000/yr. This is what most serious hosts use. - Safely (https://safely.com) — charges per-booking which is nice for lower volume hosts - Steadily (https://steadily.com) — competitive rates, easy online quotes At 20 guests/month you're running a real business. Don't cheap out on this. One lawsuit can wipe out years of profit.

Reply by Jessica Morales:

This one hits close to home. A guest's friend came over, tripped on my porch steps, broke their wrist. Sued me for $85K. My homeowner's insurance (USAA) said nope, "commercial purposes." Airbnb's AirCover said nope, injured person wasn't the booked guest. I was just... sitting there holding the bag. Thank GOD I had Proper Insurance as a backup policy. They covered the whole thing plus legal fees. That $1,400/year policy literally saved me from financial ruin. Seriously, get real insurance before your first guest. Not after something goes wrong.

Reply by Michael Thompson:

One thing to clarify: not all homeowners policies exclude STR. Some progressive carriers actually embrace it: - **USAA** — has an STR endorsement for $50-100/year (military families only) - **Farmers** — offers a "home-sharing" endorsement in some states - **Erie Insurance** — one of the few that covers occasional STR under standard policy (check your specific terms) - **Allstate** — HostAdvantage program specifically for Airbnb hosts Before buying a separate $1,200 policy, call your homeowner's agent and ask: "Does my policy cover short-term rental activity, and if not, can I add an endorsement?" You might be surprised. That said, if you're hosting 20 guests/month, you're running a serious business. A dedicated policy like Proper Insurance is probably the smart move at that volume.