Insurance and Airbnb: What Every Short-Term Rental Host in Arizona Needs to Know

​The short-term rental boom has taken over Arizona — from cozy cabins in Prescott to desert retreats in Tucson. But while the income potential is exciting, many property owners don’t realize that renting their home on platforms like Airbnb or VRBO can create serious insurance gaps.

​A standard homeowners policy is designed for personal occupancy, not business use. Once you start renting out your space — even occasionally — your coverage can change dramatically.

1. Why Your Homeowners Policy May Not Cover You

Most homeowners policies exclude losses that occur while the home is being rented for profit. That means if a guest causes a fire, steals belongings, or damages property, your claim could be denied.

Even if you only rent occasionally, insurers often classify it as “business activity.” Without notifying your insurance provider, you might unknowingly void your policy.

2. What Airbnb’s Host Guarantee Really Covers

Airbnb’s “Host Guarantee” offers limited protection — but it’s not true insurance. It may reimburse up to $1 million for property damage, but it:
• Doesn’t cover normal wear and tear
• Often excludes liability (guest injuries)
• Doesn’t include income loss during repairs

In short: it’s a safety net, not a substitute for insurance.

3. Specialized Short-Term Rental Coverage

Some insurers now offer short-term rental endorsements or landlord-style policies specifically for Airbnb and VRBO hosts. These can include:
• Liability coverage for guest injuries
• Property protection for furniture, décor, and fixtures
• Loss-of-income coverage if damage makes your property unrentable

If you manage multiple properties, consider a commercial short-term rental policy — these can consolidate multiple locations under one plan.

4. Common Arizona-Specific Considerations
• Desert weather: Water and storm damage during monsoon season is a big risk for vacant or partially rented homes.
• Wildfire exposure: Many properties near Sedona or Prescott require additional fire coverage.
• Guest pools or spas: Liability coverage for recreational amenities is a must.

5. What to Do Next

Before your next booking goes live:
• Tell your insurance agent you’re renting out the home (even part-time).
• Review your policy’s exclusions.
• Ask about endorsements or separate short-term rental policies.

Bottom Line:
Short-term rental income can be a game-changer — but only if your coverage keeps up. The right policy ensures that one bad guest doesn’t wipe out your investment.