Airbnb's new earnings protection explained: What's covered and what's not

Airbnb, the world's largest short-term rental operator, has just rolled out a significant upgrade to their host protection offerings – and it's creating buzz among short-term rental operators.

The new earnings protection feature, which launched this week for superhosts with plans to expand, represents a notable step up from the existing in-house coverage. Previously, the best protection came in the form of AirCover, Airbnb's insurance stand-in that provided limited protection and liability coverage. Now, they are adding an earnings protection feature that allows you to insure your property for lost earnings if it becomes uninhabitable.

If you're running an Airbnb or considering getting into the short-term rental game, here's what this new coverage actually means for your bottom line –and where it still falls short compared to comprehensive landlord insurance coverage.

What is Airbnb earnings protection?

Airbnb's earnings protection is essentially a version of loss of rent coverage designed specifically for hosts. When certain covered events make your property uninhabitable or inaccessible to guests, this insurance pays you for the rental income you're missing out on.

According to promotional materials, Airbnb will offer three levels of coverage – one, two or three months worth of income – with coverage amounts are customized based on your listing's historical earnings from the previous year.

How does Airbnb's earnings protection compare to AirCover?

If you're already familiar with AirCover, you're probably wondering what's different. AirCover has been Airbnb's standard host protection program, offering $3 million in damage protection and $1 million in liability coverage. It's included automatically for all hosts at no extra cost.

The new earnings protection feature is a paid add-on that specifically addresses income loss, something AirCover doesn't cover. While AirCover protects you from guest damage and third-party liability claims, it won't help if you're temporarily unable to rent your property due to external factors.

Think of it this way: AirCover handles the "what if a guest destroys my place" scenario, while earnings protection tackles the "what if my place can't be rented at all" problem.

What does Airbnb earnings protection actually cover?

Based on the policy documents, here's when this insurance kicks in:

Unexpected damage

If your property suffers physical damage that makes it uninhabitable, and repairs will take at least four days, you're covered. The damage must be beyond your control and result from a cause that isn't otherwise excluded in the policy.

Severe weather events

The program includes what Airbnb calls "severe payout events" for major natural disasters:

• Category 4+ hurricanes with sustained winds of 130+ mph that pass within 15 miles of your property
• Earthquakes measuring 7.5+ magnitude with significant ground acceleration at your location
• Wildfires burning 15,000+ acres where your property falls within a mandatory evacuation or containment zone for at least seven consecutive days

Loss of access

You're covered if government restrictions completely prevent access to your property for at least seven consecutive days due to:

• Transport disruptions (major airports, railways, or roads closed with no alternative access)
• Flooding
• Severe weather events
• Riots or civil commotion

Electric grid failure

If your property loses electricity for three or more consecutive days due to a grid failure (not local issues), the coverage applies.

What's not covered

Like any insurance policy, there are significant exclusions:

• Events starting before or after your coverage period
• Damage from work being done at your property
• Normal wear and tear
• Equipment breakdowns
• Government seizure or quarantine orders
• War, rebellion, or military action
• Nuclear incidents
• Communicable diseases (yes, COVID-like scenarios are explicitly excluded)
• Financial issues, insufficient bookings, or market downturns
• Cyber attacks or computer system failures

The policy also won't cover you if you're negligent or don't maintain your property properly.

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How does this compare to traditional loss of rent coverage?

Here's where things get interesting for serious property investors. Traditional landlord insurance policies often include loss of rent coverage, including Steadily's DP-1 and DP-3 products, and it typically works differently than Airbnb's version.

With a comprehensive landlord insurance policy, loss of rent coverage generally:

• Covers a wider range of perils (fire, water damage, vandalism, storm damage, etc.)
• Doesn't exclude communicable diseases or quarantine situations in all cases
• Provides coverage for the actual rental value of the property, not just historical Airbnb earnings
• Often covers both short-term and long-term rental scenarios
• Includes coverage for additional living expenses in some cases

The coverage typically kicks in when your property becomes uninhabitable due to a covered peril and continues while repairs are being made. Most policies will cover the fair rental value of your property or your actual loss of rental income, whichever is less.

The real differences between Airbnb insurance and landlord insurance

While Airbnb's earnings protection sounds comprehensive, it's important to understand that it's designed to supplement, not replace, proper landlord insurance.

What Airbnb insurance covers

• Guest damage (through AirCover)
• Host liability claims (through AirCover)
• Loss of rental income for specific covered events (through earnings protection)

What comprehensive landlord insurance covers

• Property damage from numerous perils (fire, storm, vandalism, theft, etc.)
• Liability protection beyond just guest-related incidents
• Loss of rent from any covered peril
• Additional living expenses in some cases
• Personal property of the landlord
• Fair rental value protection
• Coverage that applies whether you're renting short-term or long-term

Perhaps most importantly, landlord insurance protects you even when your property isn't listed on Airbnb. If you take a booking through another platform, rent traditionally, or simply have the property vacant between bookings, your coverage continues.

Do short-term rental hosts really need separate insurance?

The short answer: yes.

Airbnb's earnings protection and AirCover programs are nice safety nets, but they're not substitutes for comprehensive coverage. Here's why:

• Limited peril coverage: Airbnb's earnings protection only covers very specific scenarios. A kitchen fire that makes your property unrentable? That's not explicitly covered unless it meets their specific criteria. Water damage from a burst pipe? Same issue.
• Gap in coverage timing: Airbnb's programs only apply during active rental periods or specific covered events. If something happens between bookings or during a period when your property isn't listed, you're on your own.
• No structural coverage: Neither AirCover nor earnings protection will pay to repair your actual property if something goes wrong. That's all on you unless you have proper property insurance.
• Liability gaps: While AirCover provides $1 million in liability coverage, comprehensive landlord liability insurance often provides broader protection for a wider range of scenarios beyond just guest-related incidents.
• Local requirements: Many municipalities require proof of proper landlord or short-term rental insurance before issuing rental permits. Airbnb's programs typically don't satisfy these requirements.

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Read more: Airbnb's 65 new features: What hosts and landlords need to know

What short-term rental insurance should you actually have?

If you're serious about running a short-term rental business, here's what a proper insurance setup looks like:

Essential coverage components

1. Dwelling coverage: Protects the physical structure of your property from fire, storms, vandalism, and other covered perils.
2. Liability protection: Covers you if someone is injured on your property or if you're found legally responsible for damage to others. This should typically be $1-2 million minimum.
3. Loss of rent/rental income coverage: Pays for lost rental income when your property is uninhabitable due to a covered loss. This should cover both short-term rental income and potential long-term rental income if you need to pivot.
4. Personal property coverage: If you furnish your short-term rental (and you probably do), you need coverage for that furniture, appliances, linens, and equipment.
5. Umbrella insurance (optional): For additional liability protection beyond your base policy limits.

Some property owners also add:

• Equipment breakdown coverage
• Service line coverage
• Water backup coverage
• Ordinance or law coverage (for building code upgrades)
• Business income coverage for longer-term disruptions

How to get proper short-term rental coverage

Getting the right insurance for your Airbnb or vacation rental property isn't complicated, but it does require working with insurers who understand the short-term rental market.

Many traditional homeowners insurance policies specifically exclude rental activity. Some will drop you if they discover you're running an Airbnb. That's why you need a policy specifically designed for rental properties.

At Steadily, we specialize in landlord insurance that covers short-term rentals in all 50 states. Our policies are designed for property investors who are running everything from occasional vacation rentals to full-time Airbnb operations.

We understand that short-term rental properties face different risks than traditional long-term rentals, and our coverage reflects that reality. Whether you're renting out a single property in Austin or managing a portfolio of vacation rentals across multiple states, we can structure coverage that actually protects your investment.

The bottom line on Airbnb earnings protection

Airbnb's new earnings protection feature is a step in the right direction. It acknowledges that hosts need protection against income loss, and it provides coverage for some major disaster scenarios that could shut down your operation.

But it's not comprehensive insurance. It's a supplement; an add-on that might provide some value in very specific situations, but shouldn't be confused with actual landlord insurance.

Think of it like the warranty you get when you buy a new phone. It's nice to have, and it might cover some specific problems, but it doesn't replace having actual device insurance that covers theft, accidental damage, and everything else that could go wrong.

If you're running a short-term rental property, you need both:

1. Proper landlord insurance with short-term rental coverage
2. Airbnb's programs (which come free or at low cost) as additional layers

The good news? Getting comprehensive short-term rental insurance is easier than you might think. You can get a quote online in minutes and have coverage in place before your next guest checks in.

Your rental property is a business asset that likely represents a significant investment. Protecting it properly isn't optional – it's just smart business.

Ready to get properly covered? Get a quote for short-term rental insurance that actually protects your investment, your income, and your peace of mind.