Does Homeowners Insurance Cover AirBnb?
It’s no secret that Airbnb home sharing allows homeowners an easy and convenient way to make extra income. But there’s a downside to being an Airbnb host that isn’t talked about enough—the risks of opening your home to strangers. From plumbing disasters and accidental fires to stolen belongings and guest injuries, there are some serious concerns you need to be aware of before you jump on the host bandwagon—especially since your homeowners insurance policy may not cover home sharing.
Before you open your home to temporary guests, you’ll need to make sure you’ve got the right coverage in place. Stay with us as we cover how to make sure your home is safe and protected when you’re renting it out on Airbnb.
Your existing homeowner insurance policy may protect you and your renter from claims or lawsuits related to things like a visitor injuring himself on your property. But then again, it may not. That’s because things get tricky when you’re operating a business from your home—and insurers typically consider home-sharing a business activity.
It all depends on who your insurer is and how often you rent out your home. See, most home insurance policies limit how often you can rent your residence—typically six weeks per year. If you rent your home only occasionally, you may find your current homeowners insurance coverage is sufficient. But if you rent your home for more than six weeks per year, it’s likely that your insurer will exclude liability coverage—including bodily injury and property damage. For example, if a guest breaks an ankle after a fall down your stairs, or accidentally starts a fire in your kitchen, you’ll be expected to foot the bill.
That’s why, if you plan to rent out your property on a regular basis—or more than six weeks— you’ll need to find out whether or not your policy restricts coverage. If they do restrict coverage, here are some of your options to make sure you’re protected:
- Add an Airbnb insurance endorsement (or general home-sharing endorsement) to your policy. An endorsement is added on to your existing policy to cover a temporary rental. Certain endorsements may cover liability, theft, vandalism, as well as damage to guests’ property.
- Add a separate commercial insurance policy. This is the route you’ll need to take if renting out your home makes up a significant portion of your income. In many cases, a landlord policy may suffice. Landlord insurance covers your home itself, as well as any structures that are on the property, such as a garage or shed. A landlord policy typically covers you for losses such as fire or wind damage, but they won’t reimburse you for damage caused by normal wear and tear or for the loss of your guests’ personal property.
- Purchase short-term rental insurance: Some insurers sell this type of coverage specifically for Airbnb and the home-sharing industry. A short-term rental insurance policy covers issues such as infestations, mold, and accidental damage to property. They also significantly increase your personal liability coverage, which includes paying for legal fees in the event claims are made against you.
There’s no question that the home-sharing industry has exploded over the past decade. As a result, many insurers have expanded coverage to include homeowners who rent out their homes through Airbnb and similar sites. Here are a few examples:
- Allstate – Their HostAdvantage Home-Sharing insurance is a type of protection that covers your personal belongings when you’re renting out your home. For example, if a guest steals or damages something during their visit, or if your home is broken into while you’re renting it out, you’d be covered.
- Liberty Mutual – Liberty Mutual offers more than just their catchy commercials. If you’re a policyholder with them and want to share your home for more than 31 days, you can extend your current policy through Liberty Mutual HomeSharing Coverage.
- Verisk Analytics ISO – Insurance Service Offices Inc. (ISO) is a subsidiary of Verisk Analytics. They offer coverage options to address the unique risks homeowners face when renting their homes online, including liability, theft, vandalism, and damage to guests’ property.
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. Here’s what each of those policies cover—and what they don’t cover:
- Airbnb Host Guarantee: Automatically included in every Airbnb listing and free of charge, Host Guarantee protects you if a guest in your home causes damage to or burglarizes your property or personal possessions during their stay. For example, if a guest steals your laptop or starts a kitchen grease fire that causes damage, Airbnb will reimburse you for the loss.
You might think Host Guarantee is the only coverage you’ll need, but there are some important caveats to consider:
- You’ll only be reimbursed at the actual cash value of your home or personal possessions that were damaged or stolen, which means you’ll only get reimbursed for the depreciated value.
- Host Guarantee covers damage caused by guests—but it doesn’t cover “acts of nature” such as flooding, 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).
- Host Guarantee doesn’t include coverage for valuable items like jewelry, artwork, collectibles, or money.
- Host Protection Insurance: Host Protection Insurance is also automatically included and free of charge. It covers you in the event of a third-party claim of bodily injury or property damage during an Airbnb stay. That means that if a liability claim arises and it’s covered, Airbnb will handle the claim, and you won’t have to use your personal insurance. Host Protection Insurance covers up to $1 million in the following types of circumstances:
- A guest suffers an injury in your home 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.
Keep in mind that Host Protection Insurance won’t cover you in certain circumstances. Here are some caveats to keep in mind:
- If a guest in your home 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.
Remember, while Airbnb’s security deposits and Host Damage Protection plans offer coverage for damages made by the behavior of a guest, damages caused by other perils will not be covered—including loss of income, intentional acts, or mold. This is where your home-sharing insurance policy will kick in, should you need one.
Airbnb Host Guarantee and Host Protection insurance should not be substituted as a replacement for homeowners insurance. Instead, it’s intended to be supplementary protection to your primary home insurance coverage. It’s also important to know that the claims process can be tedious, as claims go through Airbnb directly and are not handled by your own insurance company.
Most standard homeowners insurance will not cover your home being rented out, even if it’s a short-term rental. And since Airbnb may not cover the loss you need covered, the best thing to do is talk to your insurance provider. Find out what coverages they offer, so that you can make sure your home is fully protected.
We get it—shopping for home insurance isn’t exactly fun. But we’re here to make sure that it’s as quick and stress-free as possible. Plus, we offer the best possible coverage rates to help you save. Get your free online insurance quote today and enjoy the peace of mind that your home is protected, no matter who is staying in it.