Airbnb & Short-Term Rental Insurance Guide for Orange County Hosts

The short-term rental market is booming in Orange County. From Cerritos to Newport Beach, homeowners are turning spare rooms, guest houses, and even primary residences into profitable Airbnb rentals. With average nightly rates of $150-300+ in Orange County, the income potential is significant.

But there's a critical mistake many hosts make: assuming their regular homeowners insurance covers short-term rental activity. It doesn't.

Running an Airbnb or other short-term rental creates unique liability and property risks that standard home insurance policies explicitly exclude. One guest injury, one property damage claim, one lawsuit—and you could face hundreds of thousands in uncovered losses.

If you're hosting short-term rentals in Orange County, here's everything you need to know about proper insurance coverage.

Why Regular Homeowners Insurance Doesn't Cover STRs

Your standard homeowners insurance policy was designed for owner-occupied residential use—not commercial rental activity.

Common Policy Exclusions

Most home insurance policies include language that excludes coverage for:

• "Business activities conducted on the premises"

• "Rental of the premises to others"

• "Short-term lodging provided for compensation"

What this means: If you're collecting money from guests staying at your property, you're likely violating your insurance policy terms—even if you're unaware of it.

Real Consequences

Scenario 1: A guest trips on your stairs and breaks their leg. They sue for $150,000 in medical costs and lost wages. Your homeowners liability coverage denies the claim because it was rental activity. You pay $150,000 out-of-pocket.

Scenario 2: A guest causes a fire that damages your home. $75,000 in repairs needed. Your insurance denies the claim because the home was being used for short-term rental. You pay $75,000 out-of-pocket.

Scenario 3: A guest steals items from your home worth $10,000. Your personal property coverage doesn't apply because the loss occurred during rental activity.

These aren't hypothetical scenarios—they happen to Airbnb hosts who don't have proper insurance.

What About Airbnb's Host Protection Program?

Airbnb (and VRBO, and other platforms) offer "host protection" or "host guarantee" programs. These sound great, but they have significant limitations.

Airbnb Host Protection: What It Covers

• Up to $1 million in liability coverage for bodily injury or property damage

• Coverage for third-party claims

• Excess coverage (secondary to your own insurance)

Airbnb Host Protection: Critical Limitations

1. It's excess coverage, not primary

Airbnb's coverage only kicks in after your own insurance. If your homeowners policy denies the claim due to rental activity, Airbnb's coverage may also deny because you didn't have proper underlying coverage.

2. It doesn't cover your property

Airbnb's program covers liability to guests, not damage to your home or belongings. If a guest destroys your furniture, damages your home, or steals your possessions, Airbnb's protection doesn't pay—their security deposit system does, but that caps at $1,000-3,000, far less than potential damage.

3. Exclusions are extensive

Airbnb's protection excludes:

• Injuries to you or your family

• Intentional acts

• Business pursuits

• Certain types of property damage

• Many other scenarios

4. Claim handling is difficult

Many hosts report that Airbnb's claims process is slow, documentation requirements are extensive, and denials are common. It's not a substitute for real insurance.

5. It can be revoked

Airbnb can change or eliminate their protection program at any time. It's not a guaranteed insurance policy.

Bottom Line on Airbnb Protection

Treat Airbnb's host protection as a minimal backstop, not comprehensive coverage. You need actual insurance for short-term rental activity.

Types of Coverage Available for STR Hosts

Depending on how you use your property, you have several insurance options:

Option 1: Homeowners Insurance with Short-Term Rental Endorsement

What it is: An add-on to your existing homeowners policy that extends coverage to include short-term rental activity

Best for:

• Hosts who rent out a room in their primary residence

• Occasional rentals (renting while on vacation)

• Part-time STR hosts

Pros:

• Simplest option

• Typically affordable ($200-500/year added to your existing premium)

• Maintains your homeowners coverage for personal use

Cons:

• Not all insurers offer this

• May have limitations on rental frequency (e.g., no more than 90 days/year)

• Coverage limits may be lower than dedicated STR policies

Who offers it: State Farm, Nationwide, USAA, and some others offer STR endorsements

Cost: Adds $200-600/year to your homeowners premium

Option 2: Dwelling Fire Policy with STR Coverage

What it is: A specialized policy for rental properties that covers the structure and liability but not your personal belongings (since you're not living there)

Best for:

• Properties used exclusively for short-term rentals

• Investment properties

• Full-time STR hosts

Pros:

• Designed specifically for rental activity

• No occupancy restrictions

• Higher liability limits available

• Loss of income coverage included

Cons:

• More expensive than homeowners + endorsement

• Doesn't cover your personal property if you keep belongings on-site

• Requires separate policy, not just endorsement

Cost: $1,500-3,000/year depending on property value and location

Option 3: Specialized Short-Term Rental Insurance

What it is: Insurance policies specifically designed for Airbnb, VRBO, and other STR platforms

Best for:

• High-volume hosts (50+ bookings/year)

• Multiple properties

• Professional hosts treating STR as a business

Pros:

• Comprehensive coverage designed for STR risks

• High liability limits ($2M-5M available)

• Loss of income if property becomes unrentable

• Guest medical payments

• Theft and vandalism coverage even during rental

Cons:

• Most expensive option

• May require business insurance license

• Minimum revenue requirements for some policies

Providers: Proper Insurance, Safely, CBIZ, others specializing in STR

Cost: $2,000-5,000/year depending on property value, rental income, and coverage limits

Option 4: Commercial General Liability (Business Insurance)

What it is: Business liability insurance for hosts operating STR as a business

Best for:

• Hosts with multiple properties

• Full-time STR operators

• Hosts treating STR as primary income source

Pros:

• Very high liability limits ($1M-5M+)

• Comprehensive business coverage

• Covers multiple properties

• Professional protection

Cons:

• Expensive

• Requires commercial property insurance in addition to liability

• Complex to set up

Cost: $3,000-7,000/year for liability + property coverage

What Coverage You Actually Need

Regardless of which option you choose, make sure your policy includes:

1. Liability Coverage ($1M minimum, $2M recommended)

Protects you if a guest is injured or their property is damaged while on your premises.

Why you need it: Guest injuries are common. Slips, falls, burns, cuts—any injury can lead to a lawsuit. Medical costs + lost wages + pain/suffering can easily exceed $500,000.

Minimum: $1 million Recommended: $2 million Best: $2M liability + $1M umbrella

2. Property Damage Coverage (Replacement Cost Basis)

Covers your structure and contents from damage caused by guests or during rental activity.

Why you need it: Guests can cause significant damage—from small (broken furniture) to catastrophic (fire, flooding). Without proper coverage, you pay out-of-pocket.

Make sure it's replacement cost, not actual cash value.

3. Loss of Income / Business Interruption Coverage

Covers lost rental income if your property becomes unrentable due to a covered loss.

Example: A fire damages your Airbnb. Repairs take 3 months. You normally earn $4,000/month in rental income. Loss of income coverage pays you $12,000 for those 3 months.

Typical coverage: 6-12 months of lost income

4. Contents / Personal Property Coverage

Covers your furniture, appliances, electronics, linens, and other property inside the STR.

Why you need it: Airbnb properties are furnished with $10,000-50,000 in furniture, appliances, decor, electronics, etc. If a guest steals or destroys these items, you need coverage.

Make sure: The policy covers theft and vandalism by guests, not just traditional perils.

5. Guest Medical Payments

Covers medical expenses for guests injured on your property, regardless of fault.

Why you need it: Provides goodwill payments for minor injuries without litigation. Can prevent small injuries from becoming lawsuits.

Typical coverage: $5,000-10,000 per guest

6. Additional Coverages to Consider

Bed bug treatment: Some policies include coverage for bed bug infestations ($2,000-5,000 to treat)

Ordinance/law coverage: If your property must be brought to current code after damage

Equipment breakdown: Covers HVAC, appliances, etc.

Umbrella policy: Additional $1-2M in liability coverage ($300-500/year)

Orange County-Specific Considerations

If you're hosting short-term rentals in Orange County, be aware of:

Local Regulations and Permits

Many Orange County cities regulate short-term rentals:

Anaheim: Requires STR permit, occupancy limits, good neighbor policy Irvine: STRs prohibited in most areas Huntington Beach: Strict regulations, permit required Newport Beach: Limited to certain areas, permit required Cerritos: Check current city regulations (subject to change)

Insurance implication: Some STR insurance policies require that you be legally permitted to operate. Operating illegally can void coverage.

Higher Property Values = Higher Coverage Needs

Orange County homes are expensive. Average home value in Cerritos: $700,000-900,000. Ensure your dwelling coverage reflects true replacement cost, not market value.

Earthquake Risk

Standard STR policies don't include earthquake coverage. In California, this is a separate policy. Given Orange County's earthquake exposure, consider adding this.

Cost: $800-2,500/year depending on home value and location

Beach Property Considerations

Coastal STRs face additional risks: saltwater damage, storm surge, wind, and higher liability exposure. Make sure your policy addresses these specific perils.

How to Disclose STR Activity to Your Insurer

Many hosts are nervous about telling their insurance company about short-term rental activity. Here's how to approach it:

Step 1: Contact Your Current Insurer

Call your current homeowners insurance agent and ask: "I'm considering hosting short-term rentals on Airbnb. Does my current policy cover this, or do I need additional coverage?"

Step 2: Be Honest About Your Plans

Explain:

• How often you plan to rent (occasional vs. full-time)

• Whether you'll be present during rentals

• Expected income

• Type of guests (families vs. business travelers, etc.)

Step 3: Get Coverage Options in Writing

Don't just accept verbal assurances. Get written confirmation of:

• What coverage applies to STR activity

• Any exclusions

• Cost to add STR endorsement

• Alternative policy options if they don't cover STR

Step 4: Shop Around If Needed

If your current insurer doesn't offer STR coverage or the cost is prohibitive, shop with an independent agent (like us) who represents multiple carriers that specialize in STR coverage.

What If You Don't Disclose?

Some hosts think: "I'll just not tell my insurance company and hope nothing happens."

This is a terrible idea:

• If you have a claim, they'll investigate and discover the STR activity

• Your claim will be denied

• Your policy may be cancelled

• You could be sued by injured guests with zero coverage

• You're personally liable for all damages

Bottom line: Disclose your STR activity and get proper coverage. The cost of proper insurance is far less than the cost of being uninsured during a claim.

Real-World STR Insurance Claims

To illustrate why proper coverage matters, here are real scenarios:

Case 1: Guest Injury

An Orange County host rented a room on Airbnb. A guest slipped in the bathroom and fractured her hip. She sued for $180,000 (medical costs, lost wages, pain/suffering). The host's homeowners insurance denied the claim due to rental activity exclusion. The host had to pay $180,000 personally—plus attorney fees—because they didn't have STR coverage.

Lesson: $1M in STR liability coverage would have cost $400/year. Instead, the host paid $180,000+.

Case 2: Fire Damage

A Cerritos host rented their home while on vacation. Guests left a candle burning, causing a fire that resulted in $95,000 in damage. The homeowners policy denied the claim because the home was being rented. The host paid $95,000 out-of-pocket for repairs.

Lesson: Dwelling coverage for STR would have cost $800/year. Instead, the host paid $95,000.

Case 3: Theft

Guests staying at an Airbnb stole $15,000 in electronics, art, and jewelry. The host filed a claim. The homeowners insurance denied due to business use exclusion. Airbnb's security deposit covered $1,000. The host lost $14,000.

Lesson: Personal property coverage for STR contents would have cost $300/year. Instead, the host lost $14,000.

Cost Analysis: Is STR Insurance Worth It?

Let's run the numbers:

Scenario: You rent out a room in your Cerritos home 50 nights/year at $150/night = $7,500/year income

Insurance options:

Option 1: Do Nothing (Risky)

• Cost: $0

• Risk: 100% personal liability for all claims

• Expected loss: Even a 5% chance of a $50,000 claim = $2,500 expected annual cost

Option 2: STR Endorsement

• Cost: $400/year

• Coverage: $1M liability, property damage, loss of income

• Net income after insurance: $7,100

Option 3: Dedicated STR Policy

• Cost: $1,200/year

• Coverage: $2M liability, comprehensive property, loss of income

• Net income after insurance: $6,300

Analysis: Even with insurance costing $400-1,200/year, your net income is $6,300-7,100—far better than facing a $50,000-200,000 uninsured claim.

ROI on insurance: Extremely high. One prevented claim pays for 50-100 years of premiums.

Getting STR Insurance in Orange County

Ready to get proper coverage? Here's how:

Step 1: Determine Your Hosting Situation

• Occasional host (rent your home while traveling)?

• Part-time host (rent a room regularly)?

• Full-time host (dedicated STR property)?

• Multiple properties?

Step 2: Calculate Your Coverage Needs

• Property value / replacement cost

• Contents value (furniture, appliances, etc.)

• Expected rental income (for loss of income coverage)

• Liability exposure (consider umbrella if you have significant assets)

Step 3: Get Quotes from Multiple Sources

Contact your current homeowners insurer: Ask about STR endorsements

Contact an independent agent (us): We work with multiple carriers that offer STR coverage and can compare options

Contact specialized STR insurers: Proper Insurance, Safely, CBIZ, others

Step 4: Compare Coverage and Price

Don't just choose the cheapest option. Compare:

• Liability limits

• Property damage coverage and basis (replacement cost vs. ACV)

• Loss of income limits

• Coverage for guest-caused damage

• Claims handling reputation

• Exclusions

Step 5: Purchase and Document

Once you choose a policy:

• Keep all documents accessible

• Inform guests of rules to minimize liability

• Document condition before each guest

• Take photos/video of property regularly

Best Practices for STR Hosts

Beyond insurance, protect yourself with smart hosting practices:

1. Screen Guests

• Require verified profiles

• Check reviews

• Communicate clearly before booking

• Establish house rules

2. Maintain Your Property

• Regular safety inspections

• Keep property well-maintained

• Fix issues promptly

• Install safety devices (smoke detectors, CO detectors, fire extinguishers, first aid kits)

3. Set Clear Expectations

• Provide detailed house rules

• Communicate check-in/check-out procedures

• Explain what's off-limits

• Provide local emergency contacts

4. Document Everything

• Take photos before and after each guest

• Keep records of communication

• Document any damage immediately

• Save all booking confirmations

5. Create an LLC (For Serious Hosts)

If you operate multiple properties or generate significant income, consider forming an LLC to separate personal liability from business liability.

Get Proper STR Coverage Today

Operating a short-term rental without proper insurance is one of the biggest financial risks you can take as a homeowner. One guest injury, one fire, one lawsuit—and you could lose everything.

The good news: Proper STR insurance is affordable and comprehensive coverage is available.

Ready to protect your short-term rental?

At Pinoy General Insurance, we help Orange County STR hosts get the right coverage at competitive rates. We work with multiple carriers that specialize in short-term rental insurance and can compare options to find the best fit for your situation.

Contact us today:

• Call: (562) 402-1737

• Email: info@pinoygeneralinsurance.com

• Visit: 17304 Norwalk Blvd, Cerritos, CA 90703

• Web: pinoygeneralinsurance.com

Free, no-obligation STR insurance quotes for Orange County hosts.

Protect your investment. Protect your income. Get proper STR insurance.

Frequently Asked Questions

Does my homeowners insurance cover Airbnb activity?

Almost certainly no. Most homeowners policies exclude business activity and rental use. Check your policy or ask your agent specifically.

Is Airbnb's Host Protection enough?

No. It's excess coverage with significant limitations and doesn't cover damage to your property. You need actual insurance for primary coverage.

How much does STR insurance cost?

$400-5,000/year depending on whether you get an endorsement, dedicated policy, or commercial coverage. Most occasional hosts pay $400-800/year.

What if I only rent occasionally?

You still need coverage. Even one rental per year requires proper insurance—one claim can be financially devastating.

Can I get sued by a guest?

Absolutely. Guests can sue for injuries, property damage, discrimination, and other claims. Liability coverage is essential.

What happens if I don't tell my insurance company about my Airbnb?

If you have a claim, they'll discover the STR activity and deny coverage. Your policy may also be cancelled. Don't risk it—get proper coverage.

How do I know if short-term rentals are legal in my city?

Check your city's municipal code or planning department website. Many Orange County cities require permits for STR operation.

Last Updated: January 2026