Updated September 3, 2021|4 min read
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A standard homeowners or condo insurance policy will protect your property if you’re using your home or condo as your primary residence. But if you’re renting out a home (or a room in your primary home) as an Airbnb property, you’ll need a modified or completely separate insurance policy that covers property and liability expenses in a place of business.
Airbnb offers an insurance option of their own — Host Protection Insurance — that provides up to $1 million in liability coverage if a guest files a lawsuit related to bodily injury or property damage.
Airbnb terms and conditions also include a Host Guarantee which reimburses you up to $1 million if, for example, an unruly guest burns your house down during their stay. But for protection from bad weather or break-ins and theft, you’ll need a more comprehensive policy.
Airbnb Host Guarantee and Host Protection Insurance are included with every listing, but provide minimal protection
Standard homeowners insurance typically has limited coverage for homes or areas of your home being used for business
In order for your Airbnb property to be fully covered, you’ll need short-term rental coverage
In short, not really. A standard homeowners insurance policy generally won’t cover damage to a home or section of your home if the loss happens because of an Airbnb stay.
A base homeowners or condo insurance policy will cover you against property and liability damage, but only if the home or condo is your primary residence and isn’t being utilized for commercial or business use. However, it may cover acts of nature like catastrophic storm damage to the structure of the home that had nothing to do with the Airbnb stay itself.
Secondary or vacation home policies cover unique risks associated with infrequently lived-in properties. However, for Airbnb, VRBO, and HomeAway properties, you’ll need what’s referred to as short-term rental coverage — in addition to your base policy — to be fully insured for losses that occur during a guest’s stay.
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Airbnb Host Guarantee and Host Protection Insurance cover hosts in the event of property damage or injury. However, there are a number of coverage exclusions to be aware of that you’ll want to supplement with a more well-rounded policy.
Airbnb’s Host Guarantee is included with every listed property at no extra cost. With Host Guarantee, you’re covered in the event a guest causes damage to or burglarizes your property or personal possessions during their stay. That means if a guest steals your iPad or causes a kitchen fire that damages your appliances, Airbnb will reimburse you for the loss.
There are a few things to be aware of, however, when considering if Host Guarantee is enough property coverage (hint: it isn’t).
You’re only reimbursed at the actual cash value (ACV) of your property or personal possessions that were damaged or stolen, meaning you’ll only get reimbursed for the depreciated value
Host Guarantee only covers damage caused by guests and won’t cover “acts of nature” like a bad storm or theft committed by non-guests
You need to submit your request for reimbursement within 14 days of the guest’s checkout or before your next guest checks in (whichever happens first)
There’s no coverage for valuable items like jewelry, artwork, collectibles, or money
Host Protection Insurance is also included in every Airbnb property listing, and covers you in the event of a third-party claim of bodily injury or property damage during an Airbnb stay. According to Airbnb, Host Protection Insurance is “primary” insurance, meaning if a liability claim arises and it’s covered, Airbnb will handle the claim and you don’t have to use your personal insurance. With Host Protection Insurance, you’re covered up to $1 million in the following types of circumstances:
A guest slips and falls in your home, is injured, and files a lawsuit against you
A guest accidentally causes an injury to a third-party in a common area of an apartment or condo building
A guest is injured in a common area of an apartment or condo building and a lawsuit is brought against both you and the landlord (your liability would be covered with HPI, whereas the landlord’s building policy would cover his or her own legal expenses)
Keep in mind that Host Protection Insurance won’t cover you in certain circumstances. For example, if your guest intentionally injures someone in your building and you’re sued, you may not be covered. Airbnb also won’t cover any sort of property defect that injures your guests or damages their property, including bed bugs, mold, or any sort of pest damage or loss related to neglect.
You may be wondering if the combination of your base home insurance policy and Airbnb’s built-in coverage is enough protection for your Airbnb property. Do you really need additional short-term rental coverage? The answer is yes, absolutely.
For starters, Airbnb’s Host Guarantee isn’t insurance, it’s simply a slim set of circumstances where they may reimburse you in the event a guest damages or steals your stuff. Your homeowners insurance or vacation home insurance may protect you when the property is being used for personal use, but not for commercial or business use.
Some companies may only require you to add on additional coverage, or an endorsement, to your standard homeowners insurance policy, while others have completely separate insurance policies specifically intended for frequent but temporary rentals.
Short-term rental coverage typically covers the following instances:
Coverage for loss of rent if a short-term rental is canceled because of a covered loss
Protection for damage to the property of others if it’s caused by you or your property
Theft losses if the theft occurred while renters were staying at your home
More comprehensive damage protection if a guest accidentally damages your personal property
With some insurance companies, like Liberty Mutual, Allstate, and American Family, you may be able to simply add on an endorsement to your home policy for additional coverage.
Liberty Mutual, for example, explains that your base home insurance policy will cover you if you’ve rented out your home less than 32 days in the year. But if you rent it out more than 32 days, you’ll need Liberty Mutual HomeSharing Coverage endorsement to be covered.
Below are a few companies that are geared specifically toward short-term rental properties.
They’re relatively affordable and you may be able to insure your rental property on a per-day basis. Slice, for example, allows you to insure the property on demand for around $7 a day.
Have any questions about coverage for your Airbnb? Talk to a licensed agent at Policygenius who can help you get the coverage you need for your Airbnb property.
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