Estimated Read: 10 minutes
Unlike some platforms, Airbnb does offer some level of protection for hosts if something happens at their property. Solely relying on Airbnb if something goes wrong however could put you at risk. We discuss what they offer, what they might not cover and how you can protect yourself.
What does Airbnb cover you for?
Airbnb offers two types of protection free of charge to all of its hosts. One of these is the Airbnb Host Guarantee and the other is its Host Protection Insurance Programme. In essence, the Airbnb Host Guarantee covers damage to the hosts’s property. By contrast, the Host Protection Insurance Programme covers liability claims where the guest or another third party (e.g. a neighbour) brings a claim against the host, such as where the host is sued for something that went wrong.
What kind of things does the Guarantee Cover?
The Host Guarantee is designed to cover claims where the damage caused by your guest exceeds your security deposit or in cases where there is no security deposit listed. The level of potential cover offered is up to $1 million (or the UK equivalent) of property damage. An example of where you might claim could be where a guest accidentally damages something in your property.
What the Guarantee doesn’t cover.
Airbnb also clearly lists several things on its website that it does not cover, including:
- Wear and tear. This is also likely to be excluded by insurance companies (including Pikl) but it is important to note that that if you have several guests stay at your property over the course of the year then the chance of damage caused by wear and tear may increase. It is important to keep your property maintained.
- Valuables. Ideally, you should keep any valuables outside of the property or locked away if that is not possible but if that’s not something you can or want to do then bear in mind it could be excluded from their Guarantee. For a full list of what is excluded, check out their website.
- Personal injury claims. This is covered by Airbnb’s Host Insurance Protection Programme.
- Shared or communal areas. You may not be covered if the guest damages a shared or communal area that is not part of the listing.
The above is easily found on Airbnb’s website. However, when you look further into its terms and conditions, there are a whole raft of potential exclusions woven that may limit what you can claim for.
The Guarantee is not an insurance contract.
This is stated explicitly in its terms and conditions. This means that unlike an insurance contract, you cannot complain to an insurance regulator such as the Financial Ombudsman if something goes wrong. If you need to make a large claim and you are not covered by your home insurer (more on this below), you may need to pay for any damages out of your own pocket if Airbnb refuses to cover any damages.
The process for claiming is not straightforward.
Before you make a claim, you will be required to resolve the dispute with the guest first. This may not be appropriate for every case, such as where criminal activity has occurred. You also have a short window where you are allowed to claim.
Contrast this with insurance cover. With an insurance company, you may have to submit evidence but you will be unlikely to have a short deadline (many will give you up to 180 days). You will not be required to resolve the dispute with the guest directly first either.
Unclear terms & conditions.
There appear to be several potential exclusions and the wording is not always clear.
A good example of unclear wording is the stated $1 million worth of property damage cover. The $1 million cover is actually worldwide cover for every Airbnb host, not $1 million per property. There are thousands of Airbnb hosts and this means you are probably covered for significantly less than many people may realise.
Another potential minefield is a clause stating that Airbnb will be ‘entitled to exoneration’ if the property covered or the ‘risk associated with that property’ changes materially. How something is deemed as a ‘material change’ is unclear.
What does Airbnb Host Protection Insurance cover?
The Airbnb Host Insurance Protection Programme covers hosts for up to $1 million for liability claims brought against the host. Potential scenarios where you may need this type of cover could be where a guest is injured, holds you responsible and decides to take legal action against you. Or maybe your guest accidentally damages your neighbour’s property and the neighbour takes action against you. Without liability cover, you may have to pay for any legal costs and subsequent damages yourself. Unlike the Guarantee, Airbnb’s Host Protection insurance is an insurance contract and it is great that Airbnb offers this cover free of charge to all of its hosts.
What Host Protection Insurance doesn’t cover.
Despite being insurance there are still some limitations as to what you will be covered for. It’s important to be aware of them so you know what to expect if a claim was made against you.
Loss of earnings.
If you lose income as a result of your property being damaged due to a guest related claim, you will not be able to use this cover to claim any potential future earnings you may have lost as a result of a claim. You would typically need legal cover elsewhere to claim for something like this.
$1 million cover may not be enough.
You will get up to $1 million cover per listing if you are an Airbnb host. This may seem like a lot. However, if a guest has a serious, life changing injury then the potential damages may exceed this. Imagine that your guest is young and has a lucrative career. If they earn a decent wage, have 30 or 40 plus years of work ahead of them and require lifetime care, it is quite easy to see how the cost of a claim could exceed $1 million. If you were unlucky enough to have a large claim made against you by your guest or a third party, you may have to pay thousands of pounds out of your own pocket if Airbnb is not prepared to cover any damages above $1 million.
Won’t my home insurer cover me?
You may be thinking that your home insurer will cover you for Airbnb related claims. However, based on our research, most home insurers do not cover Airbnb or similar platforms. Most landlord insurance policies do not provide adequate cover either. If your property is covered by a holiday home or second home insurance policy, you may want to check that you are covered for claims caused by paying guests staying at your property.
How specialist insurance can help.
Many standard insurance policies are not designed to provide adequate cover for paying guests, which is why you could be at risk if you listed your property on Airbnb. A dedicated insurance policy on the other hand can fill this gap in cover.
Pikl provide specialist insurance for short-term letting, including cover for properties that are let out on websites such as Airbnb and holiday homes.
If you just need cover for paying guests, you can ‘top up’ your existing cover by taking out one of our policies. This can include:
- Public liability cover including cover for guest accidents involving bodily injury.
- Legal cover to defend or pursue legal claims against guests.
- Accidental, malicious damage and theft cover if caused by a guest.
- Alternative accommodation for you or your guest if your property is being fixed as the result of a guest related claim.
- Fire and escape of water damage caused by a guest.
- Loss of keys and replacement locks cover if renting out your entire property.
We can also cover your main home, landlord or holiday home insurance if you want the convenience of having all of your cover in the same place.
If you are not happy with the level of cover provided, getting insurance with us is simple and getting a quote only takes minutes.