By The Hospitable Team
Being an Airbnb host can help you earn extra income,—but what if something happens to your vacation rental property when you open it to temporary guests? It’s important to protect your property against damage and yourself against personal liability claims with the right insurance coverage.
So if you’ve decided to rent out your home on Airbnb, you might be wondering how much insurance coverage you need to protect your assets and if there is Airbnb insurance available for homeowners.
Airbnb offers protection for hosts if something happens at their property. But you shouldn’t solely rely on Airbnb if something goes wrong. In this article, we discuss what they offer, what they don’t cover, and how to protect yourself.
You may also want to check out tips on how to avoid complaints from Airbnb guests.
AirCover for Hosts: How Does It Protect You?
Airbnb started offering insurance for hosts in 2011. It was called Host Guarantee, protecting the host’s property from damage caused by Airbnb guests. In November 2021, Airbnb introduced a new program called AirCover for Hosts, and in May 2022, the company also added AirCover for guests, which is included for free with every booking.
So what is AirCover for Hosts? It’s an umbrella name for the set of free host protections the company offers. AirCover for Hosts covers both liability and property damage. The program also includes liability insurance for hosts who offer Airbnb Experiences.
Airbnb Insurance: Is It Available Everywhere?
Airbnb insurance is available for free to any host on the platform. But you should keep in mind that states within the U.S. have their laws regarding home-sharing.
These laws and regulations can determine whether you qualify for protection under Airbnb Host Damage Protection or Host Liability Insurance. That means you should know the legal Airbnb requirements for your local area.
Moreover, you must cooperate with your local laws and landlord or condominium board rules regarding home-sharing services to access Airbnb’s insurance services. In some cities, for example, New York, this may mean that you must comply with zoning laws and apply for commercial permits. You may also be required to pay additional taxes when you rent out your property.
If you ignore these local regulations, you may be disqualifying yourself from the benefits of Airbnb insurance and the AirCover for Hosts.
Airbnb Insurance Policy: What Is Covered by AirCover?
AirCover comes with expanded protection compared to the previous host protection insurance program. Airbnb hosts are automatically covered by this new policy, so you don’t need to do anything to register or sign up for it. AirCover includes two types of insurance for hosts: Host Damage Protection and Host Liability Insurance.
With proper coverage from Airbnb’s Host Liability Insurance and their Host Damage Protection, Airbnb hosts should have peace of mind that they’ll be covered in case of damage from a guest.
That means that you’ll be able to focus on providing your guests with the best experience, and that requires some time and effort. But with software tools like Hospitable, you can automate most of your processes and ensure perfect personalized communication with your guests to make them happy.
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What Does Airbnb Host Liability Insurance Cover?
Airbnb’s free Host Liability Insurance is a liability insurance program that is available to hosts globally. That means it generally applies first regardless of other insurance policies you may have.
Host Protection insurance covers injury or property damage claims made against you by guests or other third parties (for example, neighbors). It may provide up to USD 1,000,000 in liability coverage for a host’s legal responsibility when the host is sued for something that went wrong during an Airbnb stay. People who help you run your short-term rental business, such as co-hosts and cleaners, are also included in this coverage.
Potential scenarios when you may need this insurance could be when a guest is injured during their stay, thinks you’re responsible for that and decides to take legal action against you. Or it may happen when your guest accidentally damages your neighbor’s property, and the neighbor takes action against you. Liability insurance also applies when guests’ belongings get damaged or stolen while they are staying in your rental property.
But Host Liability Insurance doesn’t cover damage or injury that results from something done intentionally (not an accident) and loss of income. It doesn’t cover damage to your property, either. This is where Airbnb’s Damage Policy comes in.
Airbnb insurance policies protect not only hosts but guests in case anything goes awry during their stay. Accidents happen, and the Host Liability Insurance Policy offers a buffer of insurance coverage if a guest gets hurt and decides to sue.
Host Damage Protection, a part of AirCover for Hosts, is intended to cover damage to your place and belongings caused by guests staying on your property, up to $1 million. It covers the following losses:
- Physical damage or loss caused by the guest during their stay in your rental property
- Unexpected damages done by a pet belonging to the guest
- Unexpected cleaning costs, such as removing cigarette odor if a guest smokes in your home
- Lost income if you cancel confirmed Airbnb bookings due to guest damage
But unlike Host Liability Insurance, this program isn’t a form of insurance, and it has some significant limitations and exclusions. Host Damage Protection doesn’t cover cash, fine art, jewelry, weapons, or pets—you can view the full list of excluded items in Host Damage Protection Terms on the Airbnb website.
So if a guest stole money from you, damaged your security camera, or injured your dog, it would not pay out. Besides, it doesn’t cover damage caused to shared or communal areas, for example, common entrance halls in blocks of flats.
How to Submit an Airbnb Damage Claim
If an incident happens, you have 30 days in total to complete the entire claim process. First, you must try to come to a resolution with the responsible guest. You have 14 days after your guest checks out to file an AirCover for Hosts request through Airbnb’s Resolution Centre.
Your guest will have 24 hours to pay. If they decline to pay the full amount or don’t respond, you’ll be able to involve Airbnb Support. Then you must provide documentation of the incident to Airbnb, such as proof of ownership, as well as photos and descriptions of the damage.
And if your Airbnb damage claim is successful, and you get approved for reimbursement, then the money will be returned to you after about 9-11 working days.
Airbnb Security Deposit
Recently Airbnb has announced that hosts aren’t allowed to charge guests a security deposit through Airbnb Resolution Center or outside the Airbnb platform. Instead, Airbnb informs guests at the time of booking that their payment method may be charged if they cause damage during their stay.
But hosts who manage their listings with API-connected software are an exception to this policy. They can set an Airbnb security deposit using the platform’s offline fees feature. Then the deposit requirements will be clearly communicated to their guests during the booking process.
Hopspitable.com can help you with collecting the security deposit offline. You can use your Hospitable account to inform your Airbnb guests that a security deposit is required and automate the communication around it as part of the guest’s booking flow. Check out our guide on embedding an offline security deposit request into your listings.
Airbnb Homeowners Insurance
Homeowners’ insurance may also protect your property from damage related to Airbnb or other home-sharing services. But in most insurance companies, coverage often applies only if you’re renting your property just occasionally. And that term may be defined differently by different insurers. So you should talk to your insurer or review your policy to learn more.
It’s important to remember that when a company insures your home, they assume that you and your family will use it. But they don’t imagine that the space will be used for business purposes. Some insurers view renting your home out through Airbnb as “doing business” and may be unwilling to extend your standard policy to cover business-related losses.
But there are Airbnb homeowners insurance options with enough comprehensive coverage for the property that is rented out. They can further protect hosts from damages that would not be covered under normal landlord insurance or business insurance and will protect your rental income.
You may also want to add a rental agreement between you and your Airbnb guest to get additional legal protection if damage happens. And Hospitable.com will help you schedule a message triggered by a new reservation and share the rental agreement with your guests. In fact, we can automate 90% of your communication with guests.
Have conversations with your guests even when you sleep.
Protecting your short-term rental property is vitally important; that’s why Airbnb offers hosts financial protection as a part of a contract. Airbnb’s insurance policy provides primary liability insurance coverage up to $1 million for third-party bodily injury or property damage claims.
It also typically protects the hosts from damages that the guests may have caused to the home’s structure. But it doesn’t cover everything, so those who rent their places out online should still ensure they have sufficient homeowners insurance policies.
If you plan to rent your home through Airbnb, you should also consult your insurance provider. You should find out if you need a landlord or business insurance policy for your rental property to make sure you have adequate coverage.
Recently, Airbnb announced that it no longer offers security deposit collection via the Resolution Center. Instead, hosts can only set security deposits through API-connected software. Now, using your Hospitable account, you can inform your Airbnb guests that a security deposit is required and automate the communication around it as part of the guest’s booking flow.
If you are planning to rent out your property on Airbnb, you should get ready to face Airbnb complaints from guests. Vacation rental issues happen even to the best hosts, but you shouldn’t forget that these problems, big or small, may quickly turn into bad reviews. Read the article to learn how to prevent those complaints.
An Airbnb rental agreement is a legal contract between you and your guests, which sits outside of the Airbnb platform, giving you additional legal protection in any guest malpractice event.
But what should you put in the rental agreement? How do you send it to your guests? And what are the downsides?
Let’s find out, shall we!