Airbnb Insurance: Essential Guide
The essential Airbnb insurance guide to make sure you get the right cover
Renting your room or house out on a short-term basis can reap rewards financially but it can also come with risks if you don’t have the right insurance. In our Airbnb guide, we discuss how your home insurer is unlikely to cover you for this. We also pointed out that unlike websites like Homestay and Wimdo, customers can get some measure of cover with Airbnb’s Host Guarantee and Protection Insurance. But is this enough for you if something bad happens? Here are some things to consider before advertising your home online.
Airbnb’s Host Guarantee is designed to cover hosts for up $1 million worth of property damages in the event of a claim due to a guest stay. Unlike its Host Protection Insurance (which is primarily designed to cover liability claims), the Guarantee is not an insurance contract. This is stated clearly in its terms and conditions and is the first thing you should consider before renting out your home. The implications of this are that you may not be covered for any damage incurred as a result of hosting or guest activity and you won’t be able to go to the Financial Conduct Authority if something goes wrong.
If a dispute with a guest arises, Airbnb require the host to contact the guest and try and resolve the matter first. Whilst this may be sufficient for trivial matters, this may not be appropriate where issues such as personal injury or criminal activity are involved and specialist help is needed. In addition to this, any claims are at Airbnb’s discretion if they think arbitration should continue as they are not contractually obliged to cover you. Should a host win, Airbnb requires you to seek recovery of damages against the guest. Taking out a separate policy could be an easier way of covering yourself so you don't have to go through this process.
Airbnb states on their website that they will reimburse eligible hosts if any damages occur for up to $1 million. The catch? In its terms and conditions, this amount is defined as the total policy limit, meaning that this is the total guaranteed pot that covers all Airbnb hosts worldwide. With thousands of properties listed on its website all over the world, there is a strong possibility that this pot will not be enough to cover any serious damages to your property if this limit has already been reached.
As a side note, Airbnb do offer insurance but this is primarily designed for liability claims. Many people wondering how much Airbnb's Host Protection costs may be surprised to know that it's free to its customers. Despite this, the cover they offer could be limited in certain scenarios. To cover its hosts against potential liability claims brought about by guests that are injured on your property, this insurance covers you for up to a maximum of $1 million per location in case such an event occurs. But what if this is not enough? For serious injuries, personal injury claims can often reach settlement figures well in excess of this and so not having the right light level of insurance to cover you could put you at serious risk.
Airbnb may offer some measure of cover in its guarantee for your home but this does not apply to communal areas and if your keys are lost or stolen then you’ll have to foot the bill for replacing the locks on your door. The chances of your keys getting lost or misplaced are likely to increase with the more guests that stay at your property and so this is a potential business expense that is often overlooked.
Whilst Airbnb covers third party personal injury claims, they will not cover any legal fees if you are investigated by the taxman as a result of any hosting activity. Most standard home insurance policies are not tailored to cover you for Airbnb related activities and are unlikely to cover you for the costs associated with this.
Making a claim with Airbnb can be tricky if the process continues for an extended period of time. Hosts can make a claim during the period of the guest’s stay and a maximum of 14 days after this. Once a claim has been submitted you get a maximum of 30 days for it to be resolved and if you want this to be extended you will have to get written permission.
What happens if you can’t resolve a dispute with Airbnb? If you’re not happy with the outcome you won’t be able to take legal action against them. There is also a gagging clause, which means that you’re prevented from discussing details of your case elsewhere.
Be wary if you decide to upgrade your home. Airbnb’s Host Guarantee has an exoneration clause, meaning that if your property has changed materially then they don’t have to guarantee any claims. If you decide to go without special insurance to cover your property, think carefully before deciding to upgrade your kitchen.
Unlike the Guarantee, with Pikl you’ll get an insurance contract regulated by the FCA
With our host cover starting from £1.50 per day, buy Airbnb Insurance if you want a cheap and hassle free way of getting additional protection.