If you have been considering becoming an Airbnb host to generate some extra income and make use of that extra room that you never use, you'll want to make sure that you are covered in case of injury to one of your guests.
You may also be concerned about theft by a guest or any damage they may cause in your abode, none of which you'd want to pay for out of pocket.
Hosts are covered by an Airbnb policy, but it's not comprehensive and those gaps could leave you exposed to a claim or lawsuit if the loss to the guest is severe enough.
Airbnb's insurance plan
Airbnb carries something called Host Protection Insurance, which all hosts are covered with at no charge. The plan will cover up to $1 million of liability for you and your landlord (if you have one) against property and physical damage claims by third parties.
For example, if one of your guests falls down the stairs because of an obstruction and they file a lawsuit against you, the insurance could cover the cost of defending and also paying out an award.
Similarly, if one of your guests injures another guest or a tenant in the apartment building you live in, Airbnb's insurance would also cover that.
And if your puppy gets into the guest's room and devours a $200 pair of shoes and some $300 headphones, Airbnb's policy would also kick in.
What's not covered by Airbnb
• Damage to personal property like furniture, stereo equipment, your prized china set, etc.
• Theft of your valuables.
• Sickened guest due to issues at the property, like mold.
• Slander and defamation. Both can be grounds for a lawsuit and if a guest sues a host for either one, the host will not be able to file a claim through Airbnb.
• Harm caused by intentional criminal acts. This is actually excluded on any insurance policy, even homeowner's or renter's coverage.
Do you have a coverage gap?
Fortunately, most homeowner's and renter's insurance policies will cover your personal property if it's damaged or stolen by an Airbnb guest.
While most people who own a home will have homeowner's insurance as the lender requires it, the majority of renters do not purchase renter's insurance, which they should, particularly if they are an Airbnb host. It will provide the extra security you need in case a guest sues you for something the Host Protection Insurance won't cover.
Here are some other tips:
• Keep the insurer updated. If something happens when a renter is visiting and the insurer does not know that the home is being rented out, there could be major issues with coverage. Insurers want and need to know about the home, who is living in it, or if how it is being used changes.
• The insurer may deny coverage by citing business use of a home. When a home is rented out frequently, it could be considered a business. A home insurance policy does not cover regular business activities taking place in the home. Talk to an agent to discuss renting basics, renting frequency and what will happen if a guest is injured based on a current policy.
• Consider landlord coverage. If you are frequently renting out your place, then you definitely may have a problem if you need to file a claim. Often, landlord insurance would cover most of the issues that would arise as an Airbnb host.
If you would like to discuss your coverage options, give us a call.