If you’re looking to make some side income or maximize your real estate, you may have considered using Airbnb. As one of the most popular hosting platforms in the world, Airbnb enables you to host verified guests in your home(s) and properties using a simple and easy-to-use application.
While this may be an exciting opportunity, it is not without its risks. What happens if:
- A guest wrecks your property
- Your property is missing after a guest’s stay
- Someone injures themselves on your property
For these reasons and more, you may want to protect yourself with coverage from Airbnb through its Host Protection Insurance and the Host Guarantee. While it is somewhat comprehensive in scope, you may ask yourself some questions, such as:
- Do I need Host Protection Insurance for my Airbnb, or is business insurance enough?
- Isn’t my renters insurance policy or homeowners policy able to cover this?”
As with any financial decision, it makes sense to speak to a qualified professional who’s experienced with minimizing your financial risk and optimizing your opportunities. Independent insurance agents can assess your risk and connect you with the insurance policy that keeps your Airbnb property protected.
What Protection Does Airbnb Offer?
Essentially, Airbnb insurance comes in two forms of coverage that protect its hosts from damages:
- Airbnb’s Host Protection insurance
- Airbnb’s Host Guarantee
Airbnb’s Host Protection insurance
You're automatically enrolled in Airbnb’s Host Protection insurance program whenever a guest makes a reservation at your property. Host Protection insurance functions like a liability policy. This means that Host Protection covers the costs of injury/property damage claims made against you by third parties up to $1 million of protection per incident.
Airbnb’s Host Guarantee
Also automatic upon renting out a property to a guest through Airbnb, the Host Guarantee is coverage against damages that guests inflict on your own property. Like Host Protection, the Host Guarantee offers coverage up to $1 million of protection per incident.
Bear in mind that your existing renters or homeowners insurance can also protect your property from damages related to Airbnb (or other home-sharing services, such as VRBO). We’ll cover this later in the article.
What Does Airbnb's Host Protection Insurance Cover?
Airbnb's Host Protection is a form of liability insurance, serving as protection if a guest or another individual makes a claim against you. Typical scenarios where Host Protection will kick in can range from a guest accidentally breaking someone's property to accidentally injuring another person in your townhouse’s shared hallways. Once an affected individual files a claim against you, then Host Protection would cover you.
It’s important to note that Airbnb's Host Protection liability insurance extends its coverage anywhere associated with your property, including the grounds of your home or shared elements such as your condominium building's lobby. Host Protection also applies to vehicles, trailers, and mobile homes if they are listed on Airbnb's website as accommodations.
What Does Airbnb's Host Protection Insurance Not Cover?
Host Protection does have a few flaws in its comprehensiveness. Host Protection doesn't cover:
- Acts of assault and battery
- Mold or fungal growth caused by occupancy
- Acts committed by intoxicated adults and minors
- Sexual assault
However, there’s a significant gap in Host Protection. Because it functions mainly as liability insurance, Host Protection doesn’t cover any damage to your own property. Luckily, this is where Airbnb's other included coverage, the Host Guarantee, comes in.
When Does Airbnb’s Host Guarantee Cover Your Property?
Airbnb's Host Guarantee, unlike their Host Protection liability insurance, is not a form of insurance per se. Instead, Host Guarantee has some similarities to regular personal property coverage with limitations.
Essentially, Host Protection covers damage that guests staying on your listed property caused to your own belongings for up to $1 million dollars. If you make a successful claim that adheres to Airbnb’s timeline (see below), you may receive compensation equal to the actual cash value of your affected property. This means that you’ll receive the item's worth minus any deductions for physical depreciation. Another distinction from regular insurance is that there’s no way to upgrade to guaranteed replacement coverage through Airbnb.
How to Qualify for the Host Guarantee
You have to take immediate action to qualify for Host Protection with Airbnb. Here’s how it works:
- You only have a total of 30 days after an incident occurs to complete the entire claim process through Airbnb’s Host Guarantee.
- First, you must make an attempt to come to a resolution with the responsible guest within 14 days of checking out from your property.
- If the guest refuses to compensate you for damages, then you must contact Airbnb and provide documentation of the incident. Documentation includes proof of ownership, related pictures to the incident, and descriptions of the damage to your property.
- If you fail to meet these timeframes, you could potentially be disqualified from receiving any reimbursement.
What Does Airbnb’s Host Guarantee Not Cover?
Host Guarantee doesn’t cover every instance of damage to your property. You won't be protected by Airbnb's Host Guarantee if:
- Your property suffers damage from weather-related events such as high winds, heavy rains, etc.
- Any special items you own at the property are damaged or stolen, such as jewelry, artwork, or collectibles.
- Your guests injure your pet.
- Your property develops mold or bacterial growth.
Does Homeowners and Renters Insurance Cover Airbnb?
Considering that Airbnb’s Host Protection and Host Guarantee are included in the price of your rental under fees, they’re a pretty good deal. However, the aforementioned limitations of Airbnb’s coverage raises the question, “Does homeowners and/or renters insurance cover Airbnb rentals?”
In most typical scenarios, a homeowners or renters insurance policy will still insure your property from liability, damage, weather damage, and more. However, there’s a catch. You must adhere to your homeowners/renters policy which usually only allows for short-term rentals (if at all).
Some renters insurance programs state a clear period per year where you can’t rent out your rental, with an average of 90 days being the industry norm. Other policies may deny coverage depending on how much money you generate from renting out your rental, where more than a couple thousand in profit a year could disqualify you for coverage.
To be sure, investigate each insurer’s definition of "occasional home-sharing” and do your due diligence. You could potentially run into problems with your insurance company if your lease does not permit you to participate in home-sharing. In most cases, breaking the rules will result in your claim being denied.
To see whether your current policies are sufficient to cover your Airbnb rentals, contact an independent insurance agent. With their expertise, you can get clear information about your current policies regarding rentals as well as your options for insurers that provide Airbnb-based insurance coverage.
Is Airbnb Insurance Available In My Area?
Last, Airbnb coverage varies per state, city, and even neighborhood. Although Airbnb’s Host Protection and Host Guarantee are for free for hosts on the platform, states throughout the United States have their own laws. This can make it tricky to decipher whether you qualify for protection under both the Host Guarantee and Host Protection agreements.
As an example, some cities like Los Angeles and New York require complying with current zoning laws, being approved for commercial permits, and/or paying extra taxes when you rent your property through Airbnb. And just like most insurance policies, ignoring these regulations may disqualify you from the benefits of Airbnb Host Insurance.
On top of this, you must also take into account not only state- and city-level regulations, but also factor in approval from your homeowners association (HOA) or condominium board for approval. Because these entities often deal with shared property and amenities, approval can be more difficult to obtain.
Now that you understand how to adequately insure your Airbnb property, it’s time to take action and protect your investment. Independent insurance agents are able to:
- Guide you through all of the insurers that offer competitive policies
- Make sense of the fine print
- Clarify coverages and limitations of each policy
- Make sense of city and state specific rules on your Airbnb property
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