Short-term rental insurance: how it works and which insurance companies offer it

By: Renee Sylvestre-Williams on September 9, 2025

Quick summary:

Standard home insurance often excludes coverage for short-term rentals
Platforms like Airbnb and Vrbo offer limited protection that doesn’t replace insurance
Dedicated short-term rental insurance helps safeguard income, liability, and property

This article has been updated from a previous version.

Renting out your home or cottage for short stays can be a rewarding way to earn extra income, but it also comes with unique risks, especially when guests are involved.

To help protect your property and finances, short-term rental insurance offers coverage tailored to homeowners who list on platforms like Airbnb or Vrbo. Unlike standard home insurance, which often excludes guest-related incidents, this type of policy is designed to cover property damage, theft, liability claims, and even loss of rental income.

Whether you're renting out a cottage for the summer or listing your condo for weekend stays, this type of insurance helps safeguard your space and your earnings.

Here’s what you need to know about how short-term rental insurance works and which Canadian providers offer it.

What is short-term rental insurance?
Short-term rental vs. homeowners’ insurance: What’s the difference?
What does short-term rental insurance cover?
What rental platforms cover—and what they don’t
Other platforms worth knowing when renting your property
Cost and providers of short-term rental insurance in Canada

What is short-term rental insurance?

Short-term rental, also known as home-sharing insurance, is a type of insurance that covers your property and potential liabilities while renters stay in your home.

If you rent out your primary home or vacation property for a short period of time, usually up to six months, this protection will prove to be necessary.

Short-term rental insurance may also be offered as Airbnb insurance, but we’ll get to that later.

Short-term rental vs. homeowners’ insurance: What’s the difference?

If you’re planning on renting out your primary home on a short-term basis, talk to your primary home insurance provider to see if your current policy already covers you for short-term rentals.

However, if you’re planning on renting out your property on an ongoing basis, your regular home insurance probably won’t cover any damages caused by your guests/tenants. This is because most home insurance policies assume you’re the owner and occupier of the residence.

Your policy can be invalidated on grounds of misrepresentation if homes are unoccupied by the owner for more than 30 to 90 days. The longer you’re away from the property, the greater the risk of a peril happening and not being tended to, and the higher the perceived risk by your insurer.

Short-term rental insurance is designed for ‘commercial’ use of your property, specifically when hosting guests, whereas home insurance protects long-term occupancy.

What does short-term rental insurance cover?

Short-term rental insurance covers more than theft and damage. Most policies will also cover:

Accidental and deliberate damage: Short-term rental insurance protects against both accidental or intentional damage caused by guests or tenants. Whether it’s a broken window or vandalism, you’ll be protected.
Theft: If a guest or tenant steals from your property, your policy will cover the loss.
Legal liability (with exceptions): Short-term rental insurance addresses legal liability. However, it won’t cover poor home conditions that are neglected and left unfixed by the owner leading to claim denials.
Loss of income: Imagine a scenario where guests cause significant damage to your property that leaves it uninhabitable. In this case, your coverage will help compensate for any loss in income from rentals during repairs.
Cost of utilities: Sometimes guests can be overly enthusiastic about using utilities, like water or hydro. If their usage leads to significantly higher utility bills, your insurance may cover the increased costs.
Replacement costs: The cost of having to replace the keys and change the locks for security reasons.

What rental platforms cover—and what they don’t

For Canadians listing their homes, cottages, or condos on short-term rental platforms, built-in protections may offer some peace of mind, but they’re far from comprehensive. Understanding what’s covered (and what isn’t) is important before welcoming guests.

Airbnb

Airbnb’s AirCover for Hosts program includes two key components:

Host liability insurance
Hosts are automatically covered for up to $1 million USD in liability if a guest is injured or if the guest’s property is damaged and the host is found legally responsible. This coverage extends to shared spaces such as lobbies and elevators.
Notably, hosts with six or more active listings may find this coverage acts as secondary insurance, meaning their personal policy could be tapped first.

Host damage protection
Airbnb offers up to $3 million USD in reimbursement for damage caused by guests to the host’s property, furnishings, or belongings. It also covers loss of rental income and cleaning costs.

However, this is not a formal insurance policy. Reimbursement is contingent on documentation and approval through Airbnb’s Resolution Center.

Limitations: Airbnb’s protections exclude damage from natural disasters, intentional acts, and excessive utility use. Crucially, they do not replace a homeowner’s insurance policy.

Vrbo

Vrbo provides hosts with $1 million USD in liability coverage, which applies if a guest is injured or causes damage to third-party property. The coverage is primary if the host lacks other insurance, and supplementary if they do.

What’s not covered: Vrbo does not offer protection for damage to the host’s property, theft, loss of rental income, or cleaning expenses.

Other platforms worth knowing when renting your property

While Airbnb and Vrbo dominate the market, Canadian hosts are increasingly exploring alternative platforms:

Booking.com: Offers global reach and supports a wide range of property types, including cottages and urban rentals.
CanadaStays: Originally a Canadian platform, now integrated with Vrbo and Expedia, popular for rural and seasonal properties.
Hipcamp: Caters to nature-based stays such as cabins, glamping sites, and off-grid retreats.
Plum Guide: A curated platform for luxury rentals, with a rigorous vetting process.
CottageVacations.com: Specializes in cottage rentals across Canada.
Direct booking websites: Many hosts are building their own sites using tools like Lodgify or Hospitable to avoid platform fees and maintain control over branding and guest relationships.

Why having rental short-term insurance still matters

Listing a property on any rental platform effectively converts it into a commercial asset. That shift can void standard home insurance policies if the rental activity isn’t disclosed. Even with platform protections in place, gaps remain, especially around property damage, liability, and income loss.

To mitigate risk, many hosts opt for dedicated short-term rental insurance. These policies typically include:

Commercial general liability
Property damage protection
Loss of rental income
Legal expense coverage
Cyber liability (for data breaches)
Condo-specific protections (e.g., contingent unit coverage). While platform protections offer a safety net, they’re not a substitute for comprehensive coverage. For hosts serious about safeguarding their property and income, standalone insurance remains the most reliable option.

Cost and providers of short-term rental insurance in Canada

Your premiums for short-term rental insurance depend on how much coverage you want, where your property is located, the value of the items in the home, and all the other things that are factored into a standard home insurance policy. Keep that in mind when you’re comparing costs.

Not all insurance companies offer short-term rental insurance. Some that do include:

Aligned Insurance
Apollo Cover
April
Aviva
BCAA
Kase Insurance
Netsurance
Wawanesa
Acera Insurance
Covalen
Able Insurance
ReFrame Insurance

Short-term rental insurance can give you the security and control required in case something happens to your income property or your primary home. Also, don’t forget to compare quotes from multiple insurance providers to find the best deal.