In the course of auditing hundreds of STR properties, certain coverage gaps appear over and over. They're not dramatic. They're not obvious. They don't announce themselves as missing coverage.
Instead, they show up as a combination of small misunderstandings about what homeowner's policies actually cover, what AirCover actually covers, what landlord policies were designed for, and what commercial liability actually requires.
Most hosts aren't dramatically underinsured in one obvious way. They're moderately underinsured in several specific ways. And the combination of those gaps creates a level of exposure that would genuinely alarm them if they understood it.
Gap #1: The Commercial Activity Exclusion
Homeowner's policies exclude coverage for commercial activity. This is explicit. The moment you list your property on Airbnb and accept payment, you've triggered this exclusion.
The impact: A claim from a paying guest will be denied entirely. You have zero coverage. You're personally liable for the full amount.
Gap #2: Inadequate Liability Limits
Most homeowner's policies cap liability coverage at $100,000 to $300,000. A serious guest injury can easily exceed these limits. If the claim is for $400,000 and your policy limit is $300,000, you're personally liable for the $100,000 difference.
The impact: Even if you had coverage, the limit might not be high enough. A severe injury (permanent disability, brain damage, death) can result in settlements or judgments far exceeding standard homeowner's limits.
Gap #3: AirCover's Ordinary Negligence Exclusion
AirCover excludes claims arising from ordinary negligence. This is the biggest gap in AirCover. Ordinary negligence is the most common type of liability claim in STRs: a slip on a wet floor, inadequate maintenance of a safety feature, a broken railing, a broken stair.
The impact: The most common types of claims—the ones most likely to happen—are explicitly excluded from AirCover's coverage. You're relying on a reimbursement program that excludes the exact type of claim you're most likely to face.
Gap #4: Loss of Rental Income Not Covered Properly
If your property becomes uninhabitable due to a covered peril (fire, flood, major water damage), most policies don't cover your actual STR revenue loss. They calculate loss-of-income based on long-term rental rates, not peak-season Airbnb rates.
You operate at $300/night during peak season. A fire makes the property uninhabitable for three months. Your actual loss is $27,000. But your policy calculates the loss based on $1,200/month long-term rent rates, so they reimburse $3,600.
The impact: A major property loss can wipe out a significant portion of your annual revenue with minimal insurance reimbursement.
Gap #5: Vacancy Period Exposure
Most policies contain vacancy clauses. If your property sits empty for more than 30-60 days, you lose coverage. For seasonal STRs or properties that have slow months, this is a real issue.
The impact: During slow seasons or unexpected empty periods, your property is uninsured. If something happens during those periods, you have no coverage.
Gap #6: Guest Theft Not Covered
Guest theft (electronics, artwork, jewelry) is often excluded or severely limited in standard homeowner's policies. But it's one of the most common STR losses. A guest steals your laptop, your camera equipment, your guests' luggage.
The impact: Your most common losses (guest theft) aren't covered. You're absorbing the cost yourself.
Gap #7: Lack of Specific STR Underwriting
Your policy was underwritten for residential use. If you have an STR incident, the carrier will re-examine your underwriting. If you failed to disclose the STR use when you bought the policy, they may rescind your entire policy—not just deny the claim.
This means they can cancel the policy retroactively, refuse to pay claims, and require repayment of premiums.
The impact: You lose coverage not just for the STR claim, but for your entire homeowner's policy. Any other claim (a fire, a regular slip-and-fall from a neighbor) might also be denied because the policy was obtained under misrepresentation.
The Cumulative Effect
Any one of these gaps alone is manageable. But in combination, they create serious exposure.
A guest injury claim for $50,000? Without proper STR coverage, that's your personal liability. A three-month property damage loss of $27,000 in revenue? The policy reimburses $3,600. Guest theft of $8,000 in equipment? Not covered. A major liability claim that exceeds your policy limits by $100,000? Your personal liability.
The total exposure from these gaps can easily reach six figures on a single incident.
How to Fix This
Get a proper audit. Understand your actual exposure. Find coverage that addresses each of these gaps specifically. Don't assume your current policy handles STR activity. Ask directly, get the answer in writing, and if the answer is no, fix it before you have a claim.
The investment in proper coverage is a fraction of what a single claim could cost you. Discover which of these gaps apply to you with our free risk score — it takes 5 minutes.
Threshold STR specializes in identifying these gaps and placing hosts with coverage that actually protects them. A professional audit takes the guesswork out of insurance planning.