Do You Need Landlord Insurance If You Rent Your Home as an Airbnb?

As a homeowner, choosing to rent out your property as an Airbnb can be a rewarding experience, but it’s not one that comes without its own set of risks. If you’re new to Airbnb, you might be unsure of what kind of protection you need, and what’s provided by the company.  That’s why it’s important to find out the answers straight from the pros, AKA independent insurance agents. Ask agents anything. They have the answers.

So if you decide to rent out your home as an Airbnb, do you need landlord insurance, or does the company’s insurance provide enough coverage? We’ve got the inside scoop from an independent insurance agent to help you answer these important questions, and much more. Here’s a deep dive into all the coverage you’d need to rent out your home through Airbnb, or even by yourself.

Do I Need Landlord Insurance to Rent Out My Home as an Airbnb?

Probably, yes. The big issue is liability coverage. You need additional coverage beyond what’s provided by your homeowners insurance or condo insurance in order to rent out your property, since these policies do not provide coverage if you use your home as a business. But whether you decide to get landlord insurance or go for the coverage provided right through Airbnb is up to you. Your independent insurance agent can also help you decide.

What Does Airbnb’s Insurance Cover?

Airbnb offers its own form of landlord insurance, which they call Host Protection insurance. This coverage provides liability insurance against the following:

• Third-party injuries: If one of your guests gets injured on your property and decides to sue you, you’re covered.
• Third-party property damage: If one of your guests gets their property damaged, stolen, or destroyed while staying at your Airbnb and sues you over it, you’re covered.

Another form of coverage offered through Airbnb is called Host Guarantee. This coverage is designed to protect the host from damage from guests to their own property. Coverage kicks in if the damage exceeds the security deposit or there was no security deposit to begin with. Host Guarantee coverage is not technically insurance, so it’s not a replacement for homeowners, condo, or renters insurance.

How Much Coverage Does Airbnb Provide?

Both of Airbnb’s Host Guarantee and Host Protection coverages offer limits of $1,000,000 in protection. The Host Guarantee Program has a list of coverage exclusions, such as:

The Host Protection insurance also comes with its own list of exclusions, such as:

This list is far from exhaustive. In order to protect against these risks and other exclusions not covered by Airbnb’s insurance, you might want to consider a business insurance policy if you decide to rent out your home regularly.

What Does Landlord Insurance Cover?

Landlord insurance is a special type of business insurance designed to protect individuals who rent out their property to third parties. Policies typically cover the following:

• Liability: Covers lawsuits filed by third parties for injuries or property damage while staying on your property.
• Commercial property: Covers damage caused to your rental property by natural disasters, fire, theft, vandalism, and more.
• Loss of income: Covers income you lose if your rental property becomes temporarily uninhabitable following a storm or other disaster.
• Worker's compensation: Covers any employees you may have if they get injured on the job.

Landlord insurance provides protection beyond what’s offered by Airbnb’s coverage. Your independent insurance agent can help you determine if you should purchase landlord insurance before becoming an Airbnb host.

Do I Need Additional Protection as an Airbnb Host?

You might want to consider additional protection to fill in the gaps in the coverage provided by Airbnb’s offerings. Also, it would be a good idea to have your own insurance in the event that Airbnb goes under as a business. That way, your own coverage would still be in place to protect you no matter what. Be sure to have a talk with your independent insurance agent to figure out if you’d benefit from an additional policy as an Airbnb host.

Common Risks of Renting Out Your Home

As with any other business endeavor, renting out your home comes with a unique set of risks. While some hazards may be more obvious, others are less apparent and may require additional planning to diminish before you decide to become a host.

Some of the most common risks of renting out your home include:

• Property damage: If you end up with disrespectful or just plain clumsy tenants, your property’s structure or furnishings may get damaged or destroyed.
• Theft: Dishonest tenants may also steal from your property or business in some way, whether it’s inventory or money.
• Business expenses: Turning your home into an Airbnb requires quite a bit of extra work, and capital. Once your home becomes a rental property, it needs to be stocked regularly with toiletries and more.
• Failure to get tenants: One less obvious risk is the inability to get tenants to rent out your property at all, which could lead to a serious loss of investments.

Your independent insurance agent can help you address these concerns and more if you decide to rent out your home as an Airbnb.

What If I Decide to Rent Out My Home without Airbnb over the Summer?

As long as you don’t rent out your home regularly, your homeowners or condo insurance won’t exclude coverage to incidents that occur while you’re renting your property out. However, certain insurance companies do require you to purchase an endorsement to cover even one short-term rental. Also, standard homeowners and condo insurance policies exclude coverage if you decide to rent out your home regularly, because that then constitutes a business.

In this case, if you’re just going to rent out your home for one summer, you’d be covered under your regular insurance policy. If you don’t plan to go through Airbnb and also don’t plan to rent out your property more frequently than on an occasional basis, you should be covered. Just make sure to double-check your specific policy with your independent insurance agent to be certain that your insurance company doesn’t require an additional endorsement.

Should My Renters Have Insurance, Too?

No, it’s not necessary. Renters are protected by their own homeowners or condo insurance while staying at an Airbnb, the same way they’d be covered if they were renting a hotel room. Homeowners and condo insurance protects renters from causing damage to the Airbnb, and also protects their personal property while staying there, such as if there was a fire on the premises. That being said, coverage is likely to be more limited than it would be within their own homes.

Here’s How an Independent Insurance Agent Would Help

When it comes to answering your important questions about insurance for Airbnb hosts and all other coverages out there, no one’s better suited to help than an independent insurance agent. These agents search through multiple carriers to find providers who specialize in business and landlord insurance, deliver quotes from a number of different sources, and help you walk through them all to find the best blend of coverage and cost.