Airbnb Host Insurance: What’s Covered?

Every second, six people check into an Airbnb (yes, you read that correctly). The short-term rental industry disruptor has become a $113 billion giant, operating in 190+ countries and covering more than 20% of the market (Search Logistics). With so much growth, it’s natural that the company has evolved to providing Airbnb host insurance to give peace of mind and protection to those renting out their properties.

The average Airbnb host earns $13,800 annually. So if you’ve been considering listing your home or rental property on the platform, you’re certainly not alone—more than 4 million other hosts have listings on Airbnb. 

Many people were (and some still are) skeptical of becoming hosts on Airbnb and other similar platforms like VRBO because of the perceived risk to their home or property. The idea is that strangers can be prone to trash a place that isn’t theirs. And while many hosts report overall positive experiences with their guests, it’s still important to be protected with the right short-term rental insurance if incidents do occur.

What risks am you exposed to as an Airbnb host without the proper short-term rental insurance coverage?

1. Liability for accidents

If a guest or visitor is injured on your property, you could be held liable for their medical expenses and damages. Without proper insurance coverage, you may have to pay for these costs out of your own pocket, which could be financially devastating.

2. Property damage

Guests or visitors may accidentally damage your property or belongings during their stay. Without adequate insurance, you may have to bear the costs of repairing or replacing damaged items, which can add up quickly.

3. Legal expenses

In the case of a lawsuit or legal dispute related to your Airbnb property, you may need to hire legal representation, which can be expensive. Without insurance coverage, you may have to pay for legal fees and court costs on your own.

4. Loss of income

If your property becomes uninhabitable due to damage or other unforeseen circumstances, you may lose out on rental income during the time it takes to make repairs. Without insurance coverage, you may not have any recourse to recover this lost income.

5. Airbnb policy violations

Airbnb has specific hosting requirements and policies that hosts are expected to comply with. If you violate these policies, such as not having proper insurance coverage as required, Airbnb may take action against you, including removing your listing from their platform or imposing penalties.

6. Financial burden

Without insurance, you may have to pay for unexpected costs related to accidents, property damage, or legal disputes from your personal savings or assets. This can result in financial strain and impact your overall financial well-being.

How can you be properly insured as an Airbnb host?

1. Review your homeowner’s insurance policy

The first step to understanding your insurance coverage as an Airbnb host is to review your homeowner’s insurance policy. Most standard policies don’t cover short-term rentals, so you may need to purchase additional coverage to protect yourself and your property. Give your insurance agent a call and they can let you know what you currently have and what you’d need.

If you’re reviewing your policy yourself, here are some things to look for:

• Exclusions related to short-term rentals: Some insurance policies may have exclusions related to short-term rentals, so make sure to review your policy carefully to see if there are any restrictions or limitations.
• Liability coverage: Liability coverage is important for protecting you in case of an accident or injury on your property. Make sure your policy includes liability coverage and that the coverage limits are adequate.
• Personal property coverage: If you’re renting out your home furnished, you may need additional coverage for your personal property. Make sure your policy includes coverage for personal property, and that the limits are adequate to cover the value of your belongings.

2. Consider Airbnb’s Host Protection Insurance

Airbnb offers Host Protection Insurance to hosts in case of liability claims up to $1 million. According to Airbnb’s website, this coverage includes: 

• Bodily injury to a guest (or others)
• Damage to or theft of property belonging to a guest (or others)
• Damage caused by a guest (or others) to common areas, like building lobbies and nearby properties

However, it’s important to note that this insurance does not cover all types of claims, including:

• Damage or injury resulting from something done intentionally
• Damage to your place or belongings caused by a guest (that’s covered by Host damage protection)
• Other exclusions apply

That last phrase “Other exclusions apply” is where you want to consult the help of a licensed insurance agent who can help you understand where you still may be without coverage.

3. Look into additional liability insurance

In addition to Airbnb’s Host Protection Insurance, you may want to consider purchasing additional liability insurance to protect yourself in case of a claim. This can include general liability insurance or an umbrella policy, which can provide additional coverage above and beyond what is offered by Airbnb.

4. Protect your property

As an Airbnb host, you may be exposing your property to more wear and tear than you would with a long-term tenant. Make sure you have adequate coverage to protect against damage caused by guests, such as broken appliances, damaged furniture, or other property damage. Some insurance policies may also offer coverage for theft or vandalism.

Home sharing insurance is a common add-on to a homeowner’s policy if you’re renting out your own home. Vacation rental insurance is more suited to a full-time Airbnb rental property.

5. Follow Airbnb’s rules and guidelines

Airbnb has specific rules and guidelines for hosts, including safety and security requirements. Make sure you follow these guidelines to reduce the risk of accidents or injuries on your property, and to avoid any potential liability claims.

6. Consider business insurance

If you’re hosting on Airbnb regularly, you may be considered a small business owner. In this case, you may want to consider purchasing business insurance to protect yourself and your property. This can include commercial property insurance, commercial liability insurance, and other types of coverage.

Need some help figuring out your short-term rental insurance needs? Give us a call.

For the vast majority of us, reviewing our insurance policy sounds a lot like reading Chinese. It’s tough to understand what the heck any of it means (unless, of course, you’re fluent in Mandarin and know Chinese characters). 

At Alliance Insurance, we don’t blame you. In fact, we don’t expect you to know a darn thing about insurance. We just ask that you know how to dial your phone or click your mouse.

We’ll review your current policies and, if needed, get you set up with the proper protection so you can earn that passive income in peace.