Does Homeowners Insurance Cover AirBnb?

It's no secret that Airbnb home sharing provides homeowners with a simple and convenient way to earn extra money. But there is a disadvantage to being an Airbnb host that is rarely discussed: the risks of opening your home to strangers. There are some serious concerns you should be aware of before becoming a host, ranging from plumbing disasters and accidental fires to stolen belongings and guest injuries—especially since your homeowners insurance policy may not cover home sharing.

Before you open your home to temporary visitors, make sure you have the proper insurance in place. Stay with us as we discuss how to keep your home safe and secure when renting it out on Airbnb.

Does Standard Homeowners Insurance Cover Your Airbnb?

Your existing homeowner insurance policy may cover you and your renter for claims or lawsuits arising from events such as a visitor injuring himself on your property. However, it is possible that it will not. This is because things become complicated when you run a business from your home, and insurers typically consider home-sharing to be a business activity.

It all depends on your insurer and how frequently you rent out your house. See, most homeowner's insurance policies limit the number of times you can rent your home—typically six weeks per year. If you only rent out your home on occasion, you may find that your current homeowners insurance policy is adequate. However, if you rent your home for more than six weeks per year, your insurer is likely to exclude liability coverage, which includes bodily injury and property damage. For example, if a guest breaks an ankle after falling down your stairs or accidentally starts a fire in your kitchen, you will be held responsible.

As a result, if you intend to rent out your property on a regular basis—or for more than six weeks—you should check to see if your policy limits coverage. If they do limit coverage, here are some alternatives to ensure your safety:

  1. To your policy, add an Airbnb insurance endorsement (or a general home-sharing endorsement). To cover a temporary rental, an endorsement is added to your existing policy. Certain endorsements may cover liability, theft, vandalism, and property damage to guests.
  2. Add a separate commercial insurance policy. This is the path to take if renting out your home provides a significant portion of your income. A landlord policy may be sufficient in many cases. Landlord insurance protects both your home and any structures on the property, such as a garage or shed. A landlord policy will usually cover losses such as fire or wind damage, but it will not cover damage caused by normal wear and tear or the loss of your guests' personal property.
  3. Purchase short-term rental insurance: Some insurers specialize in providing this type of coverage for Airbnb and the home-sharing industry. Insects, mold, and accidental property damage are all covered by a short-term rental insurance policy. They also significantly increase your personal liability coverage, which includes paying for legal fees if you are sued.

Insurance Companies That Offer Home-Sharing Coverage

Without a doubt, the home-sharing industry has exploded in the last decade. As a result, many insurers have expanded their coverage to include homeowners who rent out their homes on sites like Airbnb and others. Here are a couple of examples:

  • Allstate - Their HostAdvantage Home-Sharing insurance is a type of insurance that protects your personal belongings when you rent out your home. For example, you'd be covered if a guest stole or damaged something during their visit, or if your home was broken into while you were renting it out.
  • Liberty Mutual - Liberty Mutual provides more than catchy commercials. If you have a Liberty Mutual policy and want to share your home for more than 31 days, you can extend your current policy by purchasing Liberty Mutual HomeSharing Coverage.
  • Verisk Analytics ISO - Insurance Service Offices Inc. (ISO) is a Verisk Analytics subsidiary. They provide coverage options to address the unique risks that homeowners face when renting out their homes online, such as liability, theft, vandalism, and property damage to guests.

Does Airbnb Offer Coverage for Homeowners?

Airbnb Host Guarantee and Host Protection Insurance protect hosts in the event of damage or injury to their property. However, there are a few coverage exclusions to be aware of, which you should supplement with a more comprehensive policy. Here's what each of those policies includes—and excludes:

  • Airbnb Host Guarantee: Host Guarantee, which is automatically included in every Airbnb listing and is free of charge, protects you if a guest in your home damages or burglarizes your property or personal belongings during their stay. For example, if a guest steals your laptop or causes a grease fire in your kitchen, Airbnb will reimburse you for the loss.

You may believe that Host Guarantee is all you need, but there are some important caveats to consider:

  • You will only be reimbursed for the actual cash value of your damaged or stolen home or personal possessions, which means you will only be reimbursed for the depreciated value.
    • The Host Guarantee covers damage caused by guests, but not "acts of nature" like flooding or theft committed by non-guests.
    • You must submit your reimbursement request within 14 days of the guest's departure or before your next guest checks in (whichever happens first).
    • The Host Guarantee does not cover valuable items such as jewelry, artwork, collectibles, or money.
  • Host Protection Insurance: Host Protection Insurance is also included at no extra cost. It protects you in the event of a third-party bodily injury or property damage claim during your Airbnb stay. That is, if a liability claim arises and it is covered, Airbnb will handle the claim, and you will not be required to use your personal insurance. Host Protection Insurance provides up to $1 million in coverage in the following scenarios:
  • A visitor is injured in your home and files a lawsuit against you.
    • In an apartment or condo building's common area, a guest inadvertently injures a third party.

Keep in mind that in some cases, Host Protection Insurance will not cover you. Here are a few things to keep in mind:

  • If a guest in your home injures someone in your building on purpose and you are sued, you may not be covered.
    • Airbnb will also not cover any type of property defect that injures or damages your guests' property, such as bed bugs, mold, or any type of pest damage or loss caused by neglect.

Remember that, while Airbnb's security deposits and Host Damage Protection plans cover damages caused by a guest's behavior, damages caused by other perils, such as loss of income, intentional acts, or mold, are not covered. If you have a home-sharing insurance policy, it will kick in at this point.

Protecting Your Home During an Airbnb Rental: The Bottom Line

Airbnb Host Guarantee and Host Protection insurance are not intended to replace homeowners insurance. It is, instead, intended to supplement your primary home insurance coverage. It's also important to understand that the claims process can be time-consuming, as claims are handled directly by Airbnb rather than your own insurance company.

Most standard homeowners insurance policies will not cover your home if it is rented out, even if it is for a short period of time. And, because Airbnb may not cover the loss you require, the best thing to do is contact your insurance provider. Learn about the coverages they provide so that you can ensure your home is fully protected.