A Guest Broke Her Wrist on the Deck and Sued for $95,000. Her Homeowners Policy Denied the Claim.

*6 min read · Last updated July 1, 2026*

In this article

– Why hosting turns your home into a business – What the homeowners policy actually excludes – The coverage that closes the gap – What to do before your next booking – Frequently asked questions

Priya Nair listed her home on a short-term rental platform about eight weekends a year to help cover her mortgage. One Saturday a guest slipped on the back deck stairs, broke her wrist, and later sued for $95,000 in medical bills and pain and suffering. Priya filed the claim under the personal liability coverage on her homeowners policy, the exact protection she thought she was paying for. The insurer denied it. The injury happened during a paid rental, and her policy excludes bodily injury arising out of a business. As far as her insurer was concerned, the weekend she rented her home, she was running one.

Short-term rentals are drawing more legal and regulatory attention nationwide, from city ordinances to lawsuits against the booking platforms themselves. That scrutiny makes the coverage question more urgent, not less, because a denied claim leaves the host personally on the hook.

Why hosting turns your home into a business

Every homeowners policy is priced and written for personal, residential use. The insurer assumes the people in your home are family and guests you are not charging. When you accept money to let someone stay, the activity changes character in the eyes of the policy. It becomes a business pursuit, and business pursuits are specifically carved out of personal homeowners coverage.

This is the same logic that voids coverage when a home is used as a rental property rather than a residence, a problem we detailed in how renting out your home can void your homeowners insurance. In plain terms: the policy did not fail. It did exactly what it was designed to do, which was to not cover a business your insurer never agreed to insure and never collected premium for.

What the homeowners policy actually excludes

The business exclusion is broader than most hosts realize, and it can hit both halves of the policy in a single claim. On the liability side, the exclusion for bodily injury or property damage arising from a business meant Priya had no defense and no payout when the injured guest sued. She faced a $95,000 lawsuit alone.

On the property side, damage caused by a paying guest can be denied for the same reason. If a guest starts a kitchen fire or floods a bathroom, the insurer can treat the loss as connected to your rental business and refuse to pay for repairs to your own home. A homeowner suffers the loss but collects nothing. The renter version of this exact trap is common too, which is why we covered how subletting or listing on Airbnb voids a renters policy. The mechanics are the same whether you own or rent: the personal policy stops responding the instant money changes hands for a stay.

The coverage that closes the gap

There are three ways to be properly covered, and which one fits depends on how often you rent. If you host occasionally, many carriers now offer a home-sharing endorsement, sometimes called a host or short-term rental endorsement, that adds back liability and property coverage for the nights you rent. It sits on top of your regular homeowners policy and is often the cheapest fix for a part-time host.

If you rent frequently or list a separate unit, you may need a commercial or landlord-style policy built for rental exposure. And do not lean on the protection bundled into the booking platform itself. Host guarantees and liability programs from the platforms carry their own exclusions, conditions, and claim limits, and they often act as backup to your own insurance rather than replacing it. Treat platform coverage as a supplement, never the foundation. Whichever route you choose, tell your insurer the truth about how often you rent, because a nondisclosed rental history is itself grounds for denial.

What to do before your next booking

Call your carrier and ask, in writing, whether your policy covers short-term rental activity. If the answer is no, ask for a home-sharing endorsement quote and confirm it covers both guest injuries and guest-caused damage to your home. If your insurer will not add one, shop a carrier that specializes in home-sharing, because some do.

Confirm your liability limit is high enough for a serious injury claim, since a broken bone with a lawsuit can run into six figures, and consider a personal umbrella policy for another layer. Read the booking platform’s coverage terms so you know exactly where it stops. Priya settled her guest’s lawsuit largely out of her own savings and stopped renting entirely. The hosts who keep the income without the risk are the ones who fixed the coverage before the first guest ever checked in, not after the deck gave way.

Frequently asked questions

Does homeowners insurance cover Airbnb or short-term rentals? A standard homeowners policy usually does not. It excludes injury and damage that arise from a business, and renting your home to paying guests is treated as a business activity. You generally need a home-sharing endorsement or a separate rental policy to be covered while you host.

Can my insurer deny a claim just because I rented my home? Yes. If the loss happened during or because of a paid rental, the business exclusion can apply to both a guest’s injury claim and damage to your own property. Failing to disclose that you rent your home can also be treated as misrepresentation, which is a separate reason to deny a claim.

Is the booking platform’s host protection enough on its own? No. Platform host guarantees and liability programs have their own exclusions, limits, and conditions, and they often pay only as backup to your own insurance. Relying on platform coverage alone can leave you exposed for claims it excludes, so keep your own policy or endorsement in place.

What is a home-sharing endorsement? It is an add-on to your homeowners policy that restores liability and property coverage for the times you rent your home short-term. It is designed for occasional hosts and is usually cheaper than a full commercial policy. Not every carrier offers one, so you may need to switch to an insurer that does.

How much does it cost to add short-term rental coverage? It varies by carrier, location, and how often you rent, but an occasional-host endorsement is often a modest addition to your existing premium. That cost is small next to a single denied liability claim, which can reach tens of thousands of dollars or more when a guest is injured and sues.