By Ben Mauldin  |  Mauldin Insurance Group, Lexington, SC  |  2026

Short-term vacation rentals have become one of the most popular investment strategies in South Carolina — and for good reason. Lake Murray, Charleston, Myrtle Beach, Hilton Head, and a dozen other SC destinations generate strong rental income for hosts who list on Airbnb, VRBO, and similar platforms.

But the majority of SC short-term rental hosts are operating with a critical insurance gap they may not know about until a claim is denied.

Here's the situation: your standard homeowners insurance policy was written for owner-occupied or long-term rented properties. The moment you start accepting guests for nightly or weekly stays, you've changed the occupancy type in a way that most standard HO policies explicitly exclude. A guest injury, property damage, or fire that occurs during a rental period may be denied — regardless of how long you've paid your premium.

 

What Your Homeowners Policy Actually Says

Every homeowners policy contains language about permitted occupancy. Most standard HO-3 policies include exclusions or limitations for:

• Business activities conducted on the premises
• Properties rented for compensation (with limited exceptions for occasional rental)
• Commercial hosting — which is how insurers often classify repeated, paid short-term rentals

'Occasional rental' is vaguely defined and varies by carrier. Some allow one or two weeks of rental per year before the exclusion kicks in. Others exclude rental activity from the first night. If your Airbnb property generates regular income, assume your standard HO policy does not cover rental-period activity.

What About Airbnb's AirCover and VRBO's Property Protection?

Both Airbnb and VRBO offer some form of host protection, and hosts often assume this coverage is equivalent to a real insurance policy. It isn't.

Airbnb AirCover for Hosts

Airbnb provides up to $3 million in property damage protection and $1 million in liability protection for hosts. This sounds substantial — but the coverage is provided by Airbnb, subject to Airbnb's claims process, and has important limitations:

• It covers damage caused by guests — not all events that could damage your property during a rental period
• It requires you to exhaust other avenues (including your own insurance) before Airbnb steps in — it's a backstop, not primary coverage
• Claims processes have been widely reported as slow and inconsistently administered
• It does not cover your personal belongings stored at the property
• It does not provide the comprehensive property coverage a standalone policy would

VRBO Property Protection

VRBO's coverage is more limited and primarily focused on guest-caused damage, with liability protection available as a separately purchased add-on. Neither platform's protection is designed to replace a proper insurance policy.

The Bottom Line on Platform Coverage Treat AirCover and VRBO protection as a supplement to proper insurance, not a replacement. A property fire, a major water loss, or a serious guest injury lawsuit can easily overwhelm platform coverage — and you'd be left with the financial exposure.

 

What Coverage SC Short-Term Rental Hosts Actually Need

There are three main approaches to insuring a short-term rental property in South Carolina:

Option 1: Short-Term Rental (STR) Endorsement on Existing HO Policy

Some carriers will add a short-term rental endorsement to an existing homeowners policy. This modifies the occupancy exclusion to allow paid short-term guests and extends coverage to rental-period events. This is the simplest solution and works well for hosts who rent their property occasionally — say, a few weeks per year — while primarily occupying it themselves.

Not all carriers offer this endorsement, and those that do may limit how many nights of rental are covered.

Option 2: Standalone Short-Term Rental Policy

Specialty carriers — including companies like Proper Insurance, Safely, and others that specialize in the vacation rental market — offer policies specifically designed for short-term rental properties. These provide comprehensive property coverage, liability coverage for guest injuries, and loss of rental income protection.

For dedicated rental properties — a Lake Murray lake house, a beach home, or any property primarily used for rental income — a standalone STR policy typically provides the broadest and most reliable coverage.

Option 3: Commercial Dwelling/Landlord Policy Plus STR Rider

For hosts who operate multiple properties or generate significant rental income, a commercial dwelling policy (similar to a landlord DP-3 policy) with a short-term rental rider may be appropriate. This is typically the right structure when the property has transitioned from primarily personal use to primarily rental income.

Lake Murray — A Special Situation

Lake Murray is one of South Carolina's premier vacation rental destinations. Properties on or near the lake generate some of the highest short-term rental income in the Midlands — and carry unique risk factors:

• Waterfront properties face higher wind and hail exposure
• Dock coverage — your homeowners or landlord policy may not cover your dock, boat lift, or waterfront structure without specific endorsement
• Higher-value assets attract more costly claims — a $600,000 lakefront home with $50,000 in furnishings is a very different risk profile than a standard rental
• Guest water activities create additional liability exposure — swimming, boating, kayaking, and jet ski use on the property's waterfront can all generate liability claims

Lake Murray STR hosts need a policy that specifically contemplates waterfront exposure. A standard HO policy or even a basic landlord policy is often inadequate here.

How to Know What You Need

The right solution depends on:

• How often you rent (occasional vs. primary rental use)
• Whether you occupy the property personally
• The property's value and location (waterfront, coastal, standard residential)
• Your existing carriers and whether they offer STR endorsements
• How much rental income you generate and want to protect

This is a conversation worth having before your next booking — not after a claim is denied.

 

I work with SC Airbnb and VRBO hosts all over Lexington County, Lake Murray, and beyond. Most clients are surprised at how affordable the right coverage is compared to the risk they've been carrying.

 

Protect Your SC Vacation Rental Property   We'll review your current coverage, identify the gaps, and shop the best short-term rental insurance options for your specific property. Free, no-pressure consultation.   📞 Call or Text Ben: 803-920-8827 🌐 MauldinInsuranceGroup.com 📍 100 Old Cherokee Rd, Lexington, SC  ·  Serving all of South Carolina