Getting the appropriate Insurance coverage is a key consideration when operating a business, including running a short term rental like an Airbnb listing. Insurance for Airbnb is essential to protecting your personal assets from potential liability.
Insurance is preventative which means you should not wait until you have a problem to explore your options. Instead, insurance should be part of your pre-launch planning and you should have all of the necessary insurance coverage in place before you host your first guest.
It’s also important to make sure you are getting information about insurance for Airbnb rentals from reliable sources. Though you can learn a lot from short-term rental forums or articles shared by the mainstream media, it’s also important to consider where the information is coming from. You’re better off getting information from a variety of sources and compiling what you learn into a reliable collection.
Also, keep in mind that every Airbnb host has different circumstances and the best insurance solution for one host could be wildly inappropriate for someone else. Make sure whatever choices you make are specifically suited to your circumstances.
Insurance for Airbnb Hosts Provided by the Platform
Let’s start by exploring what protections are provided by Airbnb.
Airbnb offers two different types of insurance protection for hosts: losses to property on your premises (that’s the Host Guarantee) and protection against liability claims you might face while operating as a host (that’s Host Protection Insurance).
This seems fairly comprehensive but it’s important to realize that the platform only covers losses that occur on days your property is booked through Airbnb. Any claims filed when there are no guests booked are not covered. For instance, if your home is damaged in a storm or by vandals on a day when there are no guests, you have no insurance coverage unless you invest outside of the Airbnb platform. This is also the case if a guest extends their stay at the last minute and you don’t change the dates in the platform. Modify any reservations to reflect the actual stay of the guest so you’re be guaranteed Airbnb insurance coverage.
Airbnb Host Guarantee is damage protection that covers up to $1 million in the event of a loss or damage to your home or belongings. Airbnb calls this reimbursement protection and does not consider it insurance but it acts in much the same way insurance would. If you suffer a loss, you’re compensated for it.
To make the most of this protection from Airbnb, take inventory of everything about your property before you begin renting. Make sure you have photo documentation as well as written descriptions including the brand names of everything in the property.
It’s important to note that Airbnb’s protection doesn’t cover cash, securities, financial notes, or precious metals in bullion form.
Airbnb Host Protection Insurance provides $1 million in coverage per occurrence for any liability you assume should a guest be injured or suffer damages. So, if a guest falls and injures themselves on your property during their stay, you have $1 million in insurance coverage to protect you from legal action. There are some exceptions (for instance, if you intentionally injure a guest, you aren’t covered) but, for the most part, you don’t need to worry too much about the financial ramifications of guest injury. That said, it’s still very important to make your Airbnb property is as safe as possible for guests.
In addition to the insurance coverage offered by Airbnb to hosts, you should also consider additional insurance coverage protection.
Homeowners’ Insurance for Airbnb Hosts
Airbnb hosts should purchase the appropriate amount of homeowners’ insurance. Homeowners’ insurance is designed to cover property damage and liability claims and will apply regardless of whether you have guests booked for a stay in your Airbnb property.
Some policies do not offer coverage when damage comes as a result of paid guests so you’ll need to check your current policy or verify that the policy you’re considering offers protection for Airbnb-related claims. To determine if your current policy offers coverage, look closely at the exclusion clauses in both the liability and property damage sections of the policy.
Short Term Rental Insurance for Airbnb Hosts
In addition to homeowners’ insurance coverage, you can also invest in short term rental insurance. This is specifically designed to cover owners of short-term or vacation rentals. The ideal policy can replace standard homeowners’ insurance so you won’t need to worry about exclusions.
Many companies provide short term rental insurance and it might even be possible to move from a traditional homeowners’ insurance policy to a short term or vacation rental policy without changing your current provider. This can be beneficial because some companies offer benefits to long-term customers, especially if you haven’t filed any claims or have filed very few during the time you’ve been doing business with the company.
If your current company does not offer short term or vacation insurance coverage, there are plenty of options and you should take the time to explore the various companies and the policies they offer.
What’s the most important thing to know about short term rental insurance for Airbnb hosts? While there isn’t a wide variety of options offered at the moment, that’s changing as more and more people jump into the short-term rental business. Also, although Airbnb offers decent coverage, you should not rely on it as your sole insurance because it could leave you at a disadvantage. As an Airbnb host, you should consider yourself a small business owner, even if you are only hosting part-time. Make sure the appropriate protections are in place for your investment which, in this case, could be the use of your home.