As a property owner, putting your home up as a short-term rental on a site like Airbnb can be a great way to make extra income. But did you know that your regular homeowners insurance probably isn’t sufficient?
Before you rent out your property, you’ll need to review the homeowners insurance to determine what exactly is covered. Then, consider what add-ons and endorsements you might need.
In this blog, we’ll uncover the specifics of Airbnb’s insurance for hosts, key factors to consider in your insurance plan, and review the top insurance options tailored for Airbnb properties.
- Regular homeowners insurance is typically inadequate for Airbnb properties; additional add-ons and endorsements may be necessary.
- Airbnb hosts face risks such as vandalism, theft, unpaid rentals, bodily injury, and property damage.
- Vacant properties used solely for short-term rentals can suffer from mold, broken pipes, or appliance-related damages.
- Landlord insurance for Airbnb properties costs $1,500 to $3,500 per year.
- Airbnb provides $1 million USD liability and legal liability coverage, but it has exclusions, for example, electronic data loss and damage from assault.
Does Airbnb Offer Insurance for Airbnb Hosts?
The short answer is yes. Airbnb does offer insurance for you if you choose to become a host. But, this coverage often has specific exclusions that may come back to bite you if you’re not prepared.
Host Damage Protection
Airbnb provides Host Damage Protection, which offers coverage of up to USD 3 million if a guest damages your property during their stay.
- Property Damage: To your home or belongings caused by guests.
- Vehicle Damage: To parked vehicles caused by guests.
- Cleaning Costs: Unexpected or extra costs due to guest behavior.
- Income Loss: For canceling confirmed Airbnb bookings due to guest-caused damage.
What's Not Covered:
- Wear and Tear: Damage from normal wear and tear.
- Currency Loss: Loss of currency.
- Natural Events: Acts of nature.
The claims process can be complicated, so knowing these details is essential.
Host Liability Insurance
When you list your property on Airbnb, you automatically receive Host Liability coverage. This includes up to $1 million USD in liability insurance, covering a maximum number of claims per host property.
- Bodily Injury: To a guest or others.
- Property Damage/Theft: Belonging to a guest or others.
- Common Area Damage: Caused by a guest or others in areas like building lobbies and nearby properties.
What's Not Covered:
- Intentional Acts: Damage or injury resulting from intentional actions.
- Host’s Property Damage: Damage to your property caused by a guest (covered by Host damage protection).
- Other Exclusions: Electronic data issues, certain property types, assault and battery, expected/intended injury, fungi/bacteria-related issues.
To file a claim, complete Airbnb’s liability insurance intake form; your claim will be handled and resolved by Airbnb’s third-party insurer following the insurance policy terms.
Experience Liability Insurance
Experience Liability Insurance, part of AirCover for Hosts, offers $1 million in coverage for hosts on Airbnb. It protects you if you are legally responsible for a guest’s injury or damage/theft of their belongings during an Airbnb Experience. Co-hosts are also covered, ensuring a comprehensive safety net.
- Bodily Injury: If a guest or others are injured.
- Property Damage/Theft: For guest belongings or others’ property.
- Experience Preparation and Cleanup: Coverage extends to these activities.
- Online Experiences: Includes hosting virtual events.
What's Not Covered:
- Intentional Acts: Injuries or damages caused intentionally.
- Personal Property Damage: Your own property’s damage, loss, or theft.
- High-Risk Activities: Activities like aircraft use or extreme sports.
- Online Risks: Issues such as defamation or electronic data theft.
- Other Exclusions: Additional specific exclusions are applicable.
You’ll need to fill out Airbnb’s liability insurance intake form. Airbnb’s third-party insurer will process and manage your claim.
Keep in mind the different types of insurance you may need depending on how you’re using your property:
- Homeowners Insurance: Suitable if your policy allows for short-term rentals and you’re only renting out your property for a limited time.
- Endorsement on Your Policy: Needed if you intend to rent out your property for a short period, usually not exceeding six months.
- Landlord Insurance: Required if you are renting out your property for an extended period.
- Business Insurance: Necessary if you use your short-term rental property as a regular income-generating endeavor.
What’s Not Covered Under AirCover
AirCover, Airbnb’s insurance program for hosts, provides basic protection but does not cover everything. Key exclusions include wear and tear, loss of earnings, shared or communal areas, and personal injury claims not involving a guest. It also does not protect against damage or injury resulting from intentional acts, gross negligence, or illegal activities.
The $1 million cap might be insufficient in severe cases. Hosts should consider external home insurance policies to cover these gaps, offering broader protection for scenarios not included in AirCover. External insurance policies can ensure comprehensive coverage tailored to individual needs beyond what Airbnb provides.
What are the Most Common Problems Airbnb Hosts Experience?
When you open your home to strangers, you hope they show your property the same respect you do- but there are always risks to worry about. These Airbnb risks can impact your insurance for Airbnb property. Common issues include:
- Vandalism: This can lead to significant Airbnb property damage, whether from an unauthorized party or individual actions.
- Theft: Ranging from minor items to valuable possessions, affecting your Airbnb insurance for renters.
- Unpaid Property Rental: Despite Airbnb’s safeguards, there’s a risk of guests refusing to pay, impacting your insurance for Airbnb rental.
- Bodily Injury: As a host, it’s crucial to have Airbnb insurance for hosts to protect against liability from guest injuries.
- Damage to Your Property: Protecting your Airbnb home insurance is vital, whether the damage is intentional or accidental.
- Damage to Guests’ Property: Ensure your homeowners insurance for Airbnb covers claims against you for guest property damage.
Think about these risks when renting out your house. Horror stories abound – from mystery stains on carpets and walls to stolen items and out-of-control parties.
If you own a property for the sole purpose of renting out to others on a short-term basis, you could also encounter unexpected damages if the space is left vacant for a long period of time.
Mold, broken pipes, sewer backups, and damage caused by faulty appliances are just some of the things that might go wrong when you’re not around.
So, ensure your property has the right type of Airbnb homeowners insurance so you don’t have to pay for repairs and replacements.
Things to Look for in Your Airbnb Property Insurance
Short-term Rental Insurance (Airbnb Insurance)
As an Airbnb host, it’s essential to understand that standard homeowners insurance might not fully cover your needs when renting out your property. Short-term rental insurance, often referred to as Airbnb insurance, is designed specifically for properties listed on platforms like Airbnb. It is suitable for both your primary residence and vacation properties, typically offering coverage for up to six months.
This specialized insurance acts as a supplement to your homeowners policy, filling in coverage gaps. It’s crucial for protecting against risks like theft (of both host and guest property), vandalism, lost rental income, and legal liabilities, making it a vital consideration for anyone involved in Airbnb rental.
Landlord insurance, somewhat akin to business insurance, is more tailored for those renting out their properties for extended periods. This type of insurance typically encompasses damage to the property, loss of rental income, and third-party liability. However, it’s important to note that it may not cover tenants’ personal belongings.
While landlord insurance is an excellent option for long-term rentals, it may not be the best fit for short-term, home-sharing setups like Airbnb.
Cost Factors and Estimates
The cost of Airbnb property insurance varies widely based on several factors, including location, property type, value, contents’ value, deductible, and desired coverage level. While general estimates range from $1,000 to $3,000 annually, these can differ significantly. For instance, insuring a Brooklyn home might cost between $4,000 and $5,000 per year, while a two-bedroom apartment in upstate New York might only be $900 to $1,100 annually.
Given the many variables impacting insurance for Airbnb rental, the most effective strategy for determining precise insurance requirements and costs is consulting with an insurance provider who understands the unique needs of Airbnb insurance for homeowners.
The Best Insurance for Airbnb Property
Finding the best insurance for Airbnb hosts is crucial for protecting your property and ensuring peace of mind. With the growing popularity of Airbnb rentals, many insurance companies now offer specialized policies catering to short-term rentals’ unique needs. Here’s a rundown of the top providers offering tailored Airbnb rental insurance:
- Obie: Known for its seamless integration with Baselane’s rental property management platform, Obie offers tech-enabled, customizable coverage tailored to individual properties. Their fast, easy-to-use online platform allows quick quote requests. (Get an Instant Quote from Obie today!)
- Proper Insurance: This is a go-to for comprehensive Airbnb rental insurance. Though slightly pricier, it offers extensive coverage underwritten by Lloyd’s of London, including protection against theft, liability issues, and property damage. Their user-friendly online service is backed by an experienced team.
- Liberty Mutual: Specializing in landlord insurance, Liberty Mutual’s policies cover property, liability, and loss of rental income, mainly for secondary income-generating residences. For those renting part of their primary residence, they suggest alternative Airbnb insurance options.
- Allstate: Allstate’s HostAdvantage Home-Sharing insurance, an endorsement to your home policy, covers theft and damage to personal belongings during rental periods.
- Erie Insurance: Their Home Sharing Coverage, suitable for primary residences, includes property damage, theft, and liability coverage. They also offer business insurance for secondary income properties.
- Farmers Insurance: Offering landlord insurance with various options, Farmers’ policies cover landlord liability, property damage, loss of rental income, and more. Their Other Structures endorsement extends coverage to associated external structures.
When choosing insurance for your Airbnb property, consider factors like coverage scope, cost, and your specific rental situation. Whether it’s house insurance for Airbnb, Airbnb insurance for homeowners, or more tailored options, selecting the right policy is essential for safeguarding your investment.
How to Get a Quote for Airbnb Insurance in Minutes?
Discuss potential additional coverage for Airbnb rentals with your home insurance provider. While Airbnb provides Host Liability and Host Damage Protection, these may not be comprehensive, and the claims process can be complex. Additional insurance is recommended.
For seamless landlord insurance solutions, our partner Obie, provides a user-friendly platform, ensuring optimal coverage at competitive rates. Ideal for both new and seasoned property investors, Obie allows quick, personalized insurance quotes.
Secure your investment efficiently—get an instant quote from Obie today and confidently safeguard your property.