Home Daycare Insurance: Costs and Coverage

Your homeowners policy almost certainly does not cover a paid home daycare. You have two ways to fix that. A home day care add-on to your homeowners policy can be cheap (a Washington study found flat charges of $60 to $150), but it caps how many children you can care for, sometimes at three. A separate child care liability policy, which often also pays children's medical bills after an accident, runs roughly $500 to $2,000 a year in published prices. Either way, ask for abuse and molestation coverage.

A daycare center needs more: liability, property, workers' comp once you hire, and often a policy for the van. Expect several thousand dollars a year or more, and expect it to be harder to find than it was in 2023. Whether you must carry insurance depends on your state. By the count in our state table, 26 states and DC require centers to have liability insurance, and 9 states and DC require it for home daycares. The figures on this page were checked on October 17, 2026.

Does Homeowners Insurance Cover a Home Daycare?

Only if you are not paid, or the children are relatives. The National Association of Insurance Commissioners says most homeowners policies give limited liability coverage when you watch a friend's children for free, but if you are paid to run a daycare in your home, you must buy more insurance (NAIC).

The reason is in the policy wording. The standard homeowners form used by many insurers calls any activity you do for money a "business", and it excludes injuries that arise from a business run at your home. It makes exceptions for free care, including swapping child care with another parent, and for caring for a relative's children. It also caps business property, such as cribs, cots and toys bought for the daycare, at $2,500 (ISO HO 00 03 sample form, Insurance Information Institute). Tom Copeland, who writes about the business side of family child care, says your homeowners policy will not pay claims or defend you if a child or parent in your program is injured (Tom Copeland).

Home day care riders

Some insurers sell a home day care endorsement, also called a rider, that adds child care to your homeowners policy. In a December 2025 study for Washington's insurance commissioner, 17 insurers had filed one. Six reported prices, and in many cases the rider was a flat charge of $60 to $150. Two would only add child care for six children or fewer, and several stopped at three (Washington OIC).

Whether your own children count toward the rider's limit depends on the insurer. A 2014 guide from Maine's insurance bureau says riders are usually limited to three children not counting your own (Maine Bureau of Insurance). Some agents say other insurers count them. Ask, and get the answer in writing.

A rider can be enough for a small program. Once you are licensed for more children than it allows, you need a separate child care policy. A provider on the Daycare.com forum described exactly that: their homeowners policy listed home day care but covered only a handful of children, so they bought a separate child care liability policy for up to 12. Another provider, licensed for 12 to 16 children, wrote that the big homeowners insurers turned them down, and the few that would consider it wanted six children or fewer.

Tell your homeowners insurer

Running a daycare without telling your homeowners insurer puts that policy at risk too. Maine's insurance bureau notes that a homeowners insurer may require you to carry business liability insurance to avoid cancelling or not renewing your policy. Some states limit what the insurer can do. Florida bars an insurer from cancelling or refusing to renew only because you run a family day care home. There are exceptions, for example if you drop your separate liability policy or endorsement, or care for more children than allowed (Florida Statutes 627.70161). California bars cancelling only because you hold a family day care license (Insurance Code 676.1).

Renting does not change any of this. Maine's guide says a homeowners or renters policy will not cover day care you are paid for. Tell your landlord too, and read your lease before you open.

The Policies a Daycare Needs

Abuse coverage deserves its own question. Washington's study notes that child care liability coverages often come with different limits, sublimits or exclusions, especially for abuse. Of the companies in the table below, only about half say anything about abuse coverage on their own pages.

Workers' comp rules differ by state. Minnesota requires it even for one part-time employee (Minnesota DLI), Missouri from five employees (Missouri DOL), and in Texas most private employers can choose not to carry it (Texas Department of Insurance). Check with your state before you hire.

Driving children needs its own check. If you use a vehicle mainly for business, your personal auto policy likely does not cover it, and the insurer may charge more for business use or refuse it (Insurance Information Institute). Daycare policies have gaps here too: NEXT does not cover field trips, and NEIS gives no liability coverage for transportation. Ask about both.

What Home Daycare Insurance Costs

We found no independent average for daycare insurance. What exists are prices from a regulator's study, insurers, agencies and comparison sites, each counting something different. Here they are side by side:

For a home daycare, that points to a small flat charge for a rider if you care for very few children, and roughly $500 to $2,000 a year for a stand-alone child care policy. Our in-home daycare cost breakdown and the daycare rate calculator help you build that into your rates.

What moves your price:

• Licensed capacity. Maine's 2014 guide warns that a licensed provider's premium is based on the number of children the license allows, not the number actually in care.
• Your record. Providers told the Bipartisan Policy Center they believe insurers now use licensing inspection reports and deficiency citations to raise premiums or drop coverage (BPC). Philadelphia Insurance asks centers for a copy of the license and claims history for the current policy period plus three prior years.
• Pools, trampolines and pets. Markel's in-home program excludes swimming, pets and trampolines, NEIS gives no liability coverage for pools, animals or trampolines, and NEXT does not cover swimming pools. Assure says its policy has no pool exclusion. With a pool, ask every company before you compare prices.
• Hours. NEXT covers up to 15 hours of care a day and no overnight care, and Markel's in-home program does not take overnight care either. West Bend lists 24-hour child care in its program, in 14 states.
• Limits. Insureon says 77% of its human and social services customers choose $1 million per occurrence and $2 million in total (Insureon). Your state may set its own minimum.

Who Still Insures Daycares (October 2026)

Fewer companies write child care policies than a few years ago. In a 2024 survey of 1,173 early childhood educators by NAEYC, 80% said their liability insurance cost went up in the past year (89% of centers), 62% had trouble finding liability insurance or finding it at a price they could afford, and 32% had been denied coverage in the past year (NAEYC). In Texas, KERA News reported in October 2026 that only two traditional insurance carriers were left in the state (KERA News, via the Denton Record-Chronicle). In Washington, providers reported that one insurer, holding about 40% of the child care liability premium, had been non-renewing policies (Washington OIC study).

These are the companies we found that sell to home daycares or centers, with what their own pages say. We do not rank them, and availability changes by state.

The companies educators named most often in NAEYC's survey were Assure Child Care, Church Mutual, Markel, NEXT, Philadelphia, State Farm and West Bend. Church Mutual's child care page was no longer online when we checked, so it is not in the table.

Which States Require Daycare Insurance

The Bipartisan Policy Center's brief, updated in July 2026, counts 26 states and DC that require child care centers to carry liability insurance, from its own scan of state licensing rules. For family child care homes it counts 8 states and DC, from the Office of Child Care's national licensing database (BPC). We checked Texas ourselves and added it to the homes list, which makes 9 states and DC in the table below. Other counts differ: NAEYC's 2024 survey brief counted 30 states for centers. Rules have exceptions, and states define and license homes differently, so treat this table as a starting point and confirm with your licensing office.

Source: Bipartisan Policy Center maps (brief updated July 2026). The centers column comes from BPC's scan of state licensing rules, the homes column from the Office of Child Care's National Database of Child Care Licensing Regulations. We checked three states against their own rules and changed two rows:

• Texas: license and registration holders, which includes licensed and registered homes, have long had to carry liability insurance. On January 1, 2026, the minimum dropped from $300,000 to $100,000 per occurrence (HHSC PGL 26-11001). If you cannot get coverage, you must tell each child's parents and HHSC in writing (Human Resources Code 42.049). More in our Texas guide.
• California: a family daycare home needs liability insurance of at least $100,000 per occurrence and $300,000 a year, a $300,000 bond, or a signed affidavit from every parent (HSC 1597.531). More in our California guide.
• Louisiana (no change): no rule requires liability insurance for a registered home, but you need car insurance if you drive children. More in our Louisiana guide.

Even where the state does not require it, someone else may. NAEYC notes that funders, landlords, mortgage companies and franchise owners can require liability insurance even when state rules do not.

Insurance for a Daycare Center

A center carries the full list: general liability, abuse and molestation, accident medical for enrolled children, property or a business owner's policy, workers' comp for staff, and commercial auto if you run a van. MoneyGeek's modeled prices for small centers run $487 to $1,404 a month depending on how many of those policies you bundle.

The bigger problem is finding a company at all. In the NAEYC survey, 13% of centers whose costs rose reported an increase of $10,000 or more in a year. On an insurance agents' forum, someone asked for help finding any company that would write commercial daycare insurance in Texas, which matches what a Texas owner told BPC. Markel, Philadelphia and West Bend all sell their center programs through agents, so look for an independent agent who already places child care business. Have your license, your inspection history and three years of claims history ready.

Check your lease, your loan and any franchise agreement before you shop: landlords, mortgage companies and franchise owners can all require liability insurance (NAEYC). Our guide to daycare rent covers what a lease adds on top of rent, and our daycare franchise guide covers buying into a brand.

How to Buy Home Daycare Insurance

Have this ready before you ask for quotes: your license or registration number, the number of children your license allows, their ages, your hours, whether you have a pool or pets, and any past claims. Then ask each company the same questions:

1. Is abuse and molestation covered, and what is the limit?
2. What is the accident medical limit per child?
3. How many children does the policy cover, and do my own children count?
4. Am I covered on walks, field trips and when I drive children?
5. Is it an occurrence policy or a claims-made policy? An occurrence policy covers incidents that happen while it is in force, no matter when the claim is filed. A claims-made policy covers claims made while it is in force (Insurance Information Institute). Assure's policy, for example, is an occurrence policy.
6. Are my pets and my pool covered, or excluded?

Get at least two quotes, buy the policy before your first paying child arrives, and send your homeowners insurer a written note that you run a licensed daycare. Keep the certificate of insurance where your licensing inspector can see it.

If You Cannot Get Coverage

Start with your licensing office. Some states give you another path: Texas lets you notify parents and HHSC in writing, and California homes can use a bond or parent affidavits. Your state child care association is the next call, then your state insurance department, which may know which companies still write child care policies. Several states have studied the problem: Washington, North Carolina, Connecticut and Maryland. The national association of insurance regulators (NAIC) started a child care insurance working group in May 2026.

Your licensing record matters more than it used to. Providers told BPC they believe insurers use inspection reports to set rates, so fix citations quickly.

Home Daycare Insurance FAQ

Q:

How much does home daycare insurance cost?

A home day care rider on a homeowners policy can be cheap (a Washington study found flat charges of $60 to $150) but covers only a few children. A stand-alone child care liability policy usually runs about $500 to $2,000 a year, depending on how many children your license allows, your state and your limits.

Q:

Does homeowners insurance cover a home daycare?

Not if you are paid to care for children who are not relatives. Standard homeowners policies treat that as a business and exclude it. You need a home day care rider, if your insurer offers one and your group is small enough, or a separate child care policy.

Q:

Is daycare insurance required by law?

In some states. By the count in our state table, 26 states and DC require centers to carry liability insurance, and 9 states and DC require it for family child care homes. Some states, like Texas, let you notify parents in writing if you cannot get coverage. Check with your licensing office.

Q:

What is abuse and molestation coverage?

It pays for your defense and any damages when someone alleges abuse of a child in your care. Liability policies often exclude it or cap it, so ask for the limit in writing before you buy.

Q:

Do I need workers' comp for a home daycare?

Only once you have employees, and then under your state's rules. Some states require it from the first part-time employee, others from five, and Texas lets most private employers opt out.

Q:

Does my car insurance cover driving daycare children?

Not always. A personal auto policy covers some business use, but if you drive children regularly for the daycare, it may not. Ask your auto insurer about business use, and check whether your daycare policy covers transportation: NEXT does not cover field trips, and NEIS excludes transportation.

Q:

How much liability coverage does a daycare need?

At least your state's minimum, if it has one: Texas requires $100,000 per occurrence and California homes $100,000 per occurrence and $300,000 a year. Insureon says most of its human and social services customers choose $1 million per occurrence, and several child care programs offer up to $1 million per occurrence and $3 million a year.

Q:

Can my homeowners insurer drop me for running a daycare?

It may. Maine's insurance bureau notes that some homeowners insurers require a separate child care liability policy before they will keep you. Florida and California limit cancelling a policy only because you run a family daycare. Tell your insurer in writing either way.