Airbnb and Homeowners Insurance: What Hosts and Guests Need to Know
Airbnb and similar vacation home rental services can offer their guests great ways to explore a new city or state in a cozier alternative to a hotel. Choosing to rent out your property on these sites can also be a lucrative way of making money at your home that may be partially unoccupied or have a separate guest house.
If you are planning on renting out your property through Airbnb or other vacation home rental services, or will be staying at one yourself, you may be wondering how your homeowners insurance coverage extends to you in these situations.
At Berry Insurance, we’re no strangers to insuring properties of all types, including Airbnb and other rental properties. Before booking your next stay, or listing your own property, it’s important to know what your insurance options are in the event of any potential claims.
In this article we’ll cover what both hosts and guests must know about their homeowners insurance coverage in regards to Airbnb, and any other insurance options you have when traveling or renting out.
Insurance for Airbnb hosts:
Insurance options available for Airbnb hosts can vary depending on their insurance carrier, property type, and desired level of protection.
Most standard homeowners insurance policies are not typically designed to offer protections for the added risks that come with renting a property for extended periods of time.
Some insurance providers will allow homeowners insurance coverage to be extended for house-sharing or rental needs if it is for short periods of time, but may need to be notified beforehand. If you are looking to continually rent out your property for multiple weeks or months at a time, insurance providers may be more reluctant to insure a property they see as a larger risk.
If your insurance provider does not cover rental or house-sharing properties under their standard homeowners coverage, you may instead need to cover the home through a dwelling fire policy for rental usage. Dwelling fire policies offer similar protections as a standard homeowners policy, but are more catered to the risks that come with rental properties.
Airbnb offered insurance for hosts:
Hosts of their own Airbnb should know about the insurance policies offered through the service, often included for a host's property at no additional charge. The two policies (host protection and host guarantee) offer protections for some of the main areas of your home that could be damaged during a guest's stay.
Even with the offered coverage, it’s good to know where you are covered and where your coverage may be lacking, making other policies through your insurance provider more of a necessity.
Host protection:
Airbnb hosts have their property covered through Airbnb’s own host protection insurance, which protects hosts from being sued by guests for any injuries that may occur to them on the host’s property.
This coverage provides up to $1 million in protection against bodily injury and property damage claims, and is applied to every host’s listing at no additional cost. For example, if a guest is injured falling down your front stairs, host protection would protect you if the guest decides to sue you.
Host guarantee:
While host protection would cover legal fees, host guarantee instead covers the personal property in your Airbnb. This also provides up to $1 million in coverage for your personal property and is also applied to every host's listing at no additional cost.
Host guarantee coverage will only be applied to property within the listing itself, meaning that if the rental listing of the Airbnb is only a room or a portion of a larger dwelling, only the specified room or portion is covered.
This coverage does not apply to typical wear and tear from guests that occur overtime. It’s also important to note that this coverage is not all comprehensive, as higher value items will often have reduced coverage under host guarantee.
Damages from pets:
An important exclusion from Airbnb’s offered issuance policies for hosts is that damages from pets are not covered. Choosing to allow pets on your property can make your listing more competitive, but opens yourself up to possible damages that would not be covered through Airbnb.
Airbnb hosting for renters:
If you are currently renting an apartment or condo and are thinking of listing it through Airbnb, you should be aware of your tenant’s policies on house-sharing before listing it online. Many leases will forbid any business activity on your rental property, which would include any short term rentals through Airbnb or other house-sharing sites. If it is not allowed on your property, you could potentially open yourself up to fines or possible eviction.
Insurance for Airbnb guests:
Airbnb guests or renters, being the ones staying on and renting out the property itself, have less to worry about when it comes to insurance coverage. However, it is still good to know the ways in which you will be covered if you or your other guests damage the hosts property or belongings in any way.
As mentioned before, since Airbnb hosts would be covered through host protection and host guarantee policies, most hosts will not make claims against you if any damages occur. Still, your homeowners insurance policy would still be likely to cover you if any issues arise from damages or misplacing of the host’s personal property when you are staying at their property. This can be dependent on the insurance provider, but in most cases the liability coverage that is a part of your homeowners policy would extend to you while renting.
In the event of any injury or damage to you or other guests while on the hosts property, most of the coverage would come from Airbnb through either host protection or host guarantee policies, meaning that the hosts themselves would rarely be paying out of their own pocket for your damages.
Consider umbrella insurance:
With the added risks renting out or renting an Airbnb can add to your life, the added liability coverage offered through umbrella insurance policies can be a great way for guests (as well as hosts) to extend existing coverages on a homeowners policy.
Renting with peace of mind
Knowing how you will be protected in the event of claims can take the stress out of renting a property through Airbnb for both guests and hosts.
Before renting, it’s important to check with your own insurance agent or provider regarding your individual homeowners policy, seeing how you will be covered if you decide to rent through Airbnb.
If you are a host planning to purchase a second property to be rented through Airbnb, check out this article to learn the best ways you can insure your investment property: How to Insure an Investment Property.
If you are instead a guest who’s excited for the next getaway, read up on the top tips you can follow to protect your home while you’re away: 10 Ways to Protect Your Home While on Vacation.