The Hidden Insurance Impacts of Airbnb-Style Rentals

Short-term rentals are booming in Arizona, from cozy desert casitas to stylish cabins in the pines. But before you list your property on Airbnb, VRBO, or any other rental platform, it’s crucial to understand how it affects your insurance coverage, and how to protect your investment.

Short-term rentals are booming in Arizona, from cozy desert casitas to stylish cabins in the pines. But before you list your property on Airbnb, VRBO, or any other rental platform, it’s crucial to understand how it affects your insurance coverage—and how to protect your investment.


Home Insurance ≠ Short-Term Rental Coverage
Many homeowners assume their standard policy will cover rental activity. In most cases, it doesn’t. Hosting short-term guests is considered a business activity, and this shifts your risk profile completely.


What Can Go Wrong
Guest injuries, property damage, theft, and even lawsuits can arise from short-term rentals. Without proper coverage, you’re on the hook for out-of-pocket costs. Worse yet, filing a claim without the correct type of policy can result in claim denial or cancellation.


What You Need
Depending on your carrier, you may need:

• A landlord or rental dwelling policy
  
• A short-term rental endorsement
  
• A commercial policy for frequent or multi-property rentals
  

Additional Tips

• Inform your agent before listing your home
  
• Install cameras (outside only) and a smart lock system
  
• Use a solid rental agreement and follow local ordinances
  

Arizona Note: With tourism heavy in Sedona, Prescott, and Phoenix, local restrictions and risk levels vary. Fire scores and remote access can also influence your coverage options.


Bottom Line
Whether it’s a vacation side hustle or your main source of income, proper insurance is key to protecting your short-term rental.