Airbnb Insurance: Who's Covered?

Airbnb, the world's most well-known company for short-term housing rentals, offers its own type of insurance for hosts, called AirCover. However, there are gaps in coverage that lead some hosts to opt for other insurance providers. For example, Airbnb's Host Protection Insurance does not cover loss of income, intentional acts, or mould.

Some insurance companies offer home-sharing insurance options as an endorsement, while others sell insurance products specifically tailored to Airbnb and the home-sharing industry, known as short-term rental insurance. These policies cover issues such as accidental damage to property, infestations, and mould.

It is important to note that regular home-sharing is considered a business activity, and standard homeowners policies do not typically cover this. Therefore, it is crucial for homeowners considering renting their property via Airbnb to determine whether their homeowners insurance provides the proper coverage, as short-term rentals most often require additional endorsements or a new type of coverage altogether.

Airbnb offers free liability insurance to hosts, but it has gaps

Airbnb's Host Protection Insurance, now called Host Liability Insurance, is free for hosts and automatically included. It provides $1 million in coverage in the rare event that a host is found legally responsible for a guest getting hurt or their belongings being damaged or stolen while staying at the host's property. This includes people who help the host, like co-hosts and cleaners.

However, there are several exclusions to Airbnb's Host Liability Insurance. It does not cover damage or injury resulting from something done intentionally, or damage to the host's property or belongings caused by a guest (which is covered under Host Damage Protection). It also does not cover loss of income, intentional acts, or mould, and is not intended to replace a host's primary homeowners insurance.

Given these gaps, it is recommended that hosts consider purchasing additional insurance to ensure they are fully protected. This could include a home-sharing endorsement added to their existing homeowners insurance policy or a separate commercial insurance policy.

Some insurance companies offer home-sharing insurance options specifically designed for Airbnb hosts, such as Proper Insurance, Allstate HostAdvantage, and Erie Homeshare. These policies can cover issues like accidental damage to property, infestations, and mould, as well as increase personal liability coverage and cover legal fees.

It is important for hosts to carefully review their current insurance policies and consider the benefits of additional coverage to ensure they are adequately protected in the event of a claim.

Hosts can purchase separate insurance policies to fill these gaps

Airbnb offers its hosts a certain level of protection through its AirCover for Hosts programme. This includes $1 million in host liability insurance, which covers the host in the event that they are found legally responsible for a guest getting hurt or their belongings being damaged or stolen. However, this insurance does not cover damage to the host's property or belongings caused by a guest. For this, hosts need to rely on their own insurance policies or Airbnb's Host Damage Protection programme, which provides up to $3 million in coverage.

While AirCover for Hosts provides some protection for hosts, it is not a substitute for personal insurance. Hosts may also be required by law to maintain certain types of insurance, such as auto insurance, which is not covered by AirCover for Hosts. Therefore, it is important for hosts to understand their own insurance policies and how they overlap with the coverage provided by Airbnb.

In addition, there are some exclusions to the coverage provided by AirCover for Hosts. For example, it does not cover damage or injury resulting from something done intentionally, or certain types of property damage, such as damage to aircraft, autos, or mobile equipment. It is important for hosts to carefully review the terms and conditions of their insurance policies to understand what is and is not covered.

Due to the gaps in coverage provided by Airbnb, hosts may want to consider purchasing separate insurance policies to ensure they are fully protected. This could include purchasing a comprehensive short-term rental insurance policy from a specialised provider, or working with an insurance agent to identify any gaps in their current coverage and fill them with additional policies.

When shopping for Airbnb insurance, hosts should look for a policy that includes both property and liability coverage. The property coverage should be "open perils" or "all-risk" insurance, which covers everything unless specifically excluded. Liability insurance is equally important and should have a minimum occurrence limit of $1 million. Hosts should also consider additional coverage for business income protection, which can provide reimbursement for lost rental income in the event of property damage.

Hosts should inform their insurance company that they are using Airbnb

Standard homeowners insurance policies were not designed to cover business activity on a host's property, and insurers typically consider home-sharing a business activity. Therefore, if a host rents out their property on a regular basis, a standard homeowners policy is unlikely to provide adequate coverage. Home insurance policies often exclude liability coverage, including bodily injury and property damage, for any business activity run from the home.

Hosts who rely solely on their homeowners policy for protection may be at risk of being underinsured. However, most homeowners insurance policies offer protection for occasional rentals, as long as the insurance company is informed beforehand. Regular home-sharing is considered a business activity, and since standard homeowners policies do not cover this, hosts must add an endorsement.

An Airbnb insurance endorsement may be available through a host's current insurance company, covering theft and property damage. Certain endorsements may also cover liability, vandalism, and damage to guests' property. However, if property rentals comprise a significant portion of a host's income, a separate insurance policy may be necessary. In many cases, a landlord policy may suffice, as it covers the primary dwelling, other structures on the property, personal property inside the dwelling, lost rental income, and any liability claims.

Specialised home-sharing insurance policies, such as those offered by Proper Insurance, are tailored to Airbnb and the home-sharing industry. These policies, often known as short-term rental insurance, cover issues such as accidental damage to property, infestations, and mould. They also increase personal liability coverage and cover legal fees in the event of claims against the host.

Hosts should carefully review their insurance policies and consider the specific risks associated with home-sharing to ensure they have adequate coverage. Informing their insurance company about their use of Airbnb is a crucial step for hosts to ensure they are properly protected.

Airbnb's insurance covers guests' injuries and property damage

Airbnb offers its hosts Host Damage Protection, which is part of AirCover for Hosts. This provides hosts with $3 million in coverage if their place or belongings are damaged by a guest during their stay. This includes damage to the host's home, furnishings, valuables, belongings, and vehicles. It also covers extra cleaning costs, such as removing stains or smoke odour left by guests, and income lost due to cancellations resulting from guest-caused damage.

Host Damage Protection does not cover injury to guests or others, but this may be covered by Host Liability Insurance, also part of AirCover for Hosts. This provides hosts with $1 million in coverage if they are found legally responsible for a guest's injury or damage/theft of their belongings. This extends to people who help the host, such as co-hosts and cleaners, and damage caused by a guest to common areas.

However, Host Damage Protection and Host Liability Insurance do not apply to hosts who offer stays through Airbnb Travel, LLC, Experiences, or in Japan.

Airbnb's insurance does not cover loss of income

Airbnb's insurance, AirCover, does not cover loss of income. This means that if you are forced to cancel a booking due to damage caused by a guest, you will not be covered by AirCover.

Airbnb recommends that hosts seek additional coverage in the form of an endorsement or commercial policy. This is because regular home-sharing is considered a business activity, and standard homeowners policies do not cover this. Therefore, if you are an Airbnb host, it is important to ensure that you have adequate insurance coverage for your business.

There are a few options for obtaining the necessary coverage. One option is to add an endorsement to your current insurance policy. This can be done through your current insurance company, and it will cover theft, property damage, liability, vandalism, and damage to guests' property. However, if property rentals are a significant portion of your income, you may need to purchase a separate insurance policy. In this case, a landlord policy may suffice, as it covers the primary dwelling, other structures on the property, personal property inside the dwelling, lost rental income, and any liability claims.

Another option is to purchase a specialised home-sharing insurance policy from a company like Proper Insurance. These policies are tailored specifically for Airbnb and the home-sharing industry and are often known as short-term rental insurance. They cover issues such as accidental damage to property, infestations, and mould, as well as increasing your personal liability coverage.

It is important to carefully review your current insurance policy and understand the differences between the various types of coverage available to ensure that you have adequate protection for your Airbnb business.

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