Here’s Why Not Having An Airbnb Insurance Provider Could Cost You Big

It happens every day: property owners signing up for Airbnb looking to make some extra income throughout the year. After all, signing up for the home-sharing service is an easy process. With just a few clicks, you can have your property up on the website and have your own miniature rental/hotel business in no time. But with this ease of use comes a shocking fact: few homeowners are prepared for the financial and legal consequences of lacking coverage from an Airbnb insurance provider.

Make Sure Your Airbnb Insurance Provider Covers You

Most domestic insurers consider a short-term rental on Airbnb, no different than a hotel, and classify the transaction as “business activity.” Some carriers will provide a limited home-sharing endorsement typically worth $10,000 in coverage, but beyond that, virtually any host protection insurance claims could be denied.  See this insurance provider who denied an airbnb claim.

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Why Property Owners Need An Airbnb Insurance Company

If you’re renting out your home on Airbnb or another property rental site, it’s critical that you obtain adequate coverage before listing your home up for rent. With an increased number of states now regulating rentals, most property owners are now legally required to maintain business liability insurance if they rent out their home on a short-term basis.

If you’re about to rent out your home or you’re currently doing so, find a vacation rental insurance company that can help ensure you stay compliant with current laws and keep you protected from property damage or liability issues.

Please take 5 minutes and get an Airbnb insurance quote online with Proper Insurance today!

Beware Of Free Airbnb Insurance Providers

When listing your property on Airbnb, you may have noticed two free coverage’s offered by the short-term rental company: The Host Protection Insurance and the Host Guarantee. Both these plans were created to give property owners a peace of mind when renting out their property. However, there are a few problems with relying only on these plans. For starters, there are two main risks that homeowners face: property damage and liability. Let’s start with the Host Protection Insurance, an actual insurance plan designed to cover you for liability. Liability is a term used to describe being legally responsible for something. What most hosts aren’t aware of is that they are actually legally responsible for each guest staying in their home. In fact, in the eyes of the law, you’re not much different than an actual hotel business.

If a guest experiences injury in your home or on your property, then they may choose to hold you liable to cover medical claims and any other expenses related to their injury – even if you’re not directly responsible. These types of issues often turn into lawsuits that can drag on for years. The problem is that unlike a large hotel business, most hosts don’t have the financial means to reimburse a guest for an injury sustained in their home or pay to defend themselves from a lawsuit.

Airbnb’s Host Protection Insurance is designed to protect you from these liability claims but the problem is in the terms of the plan. Unfortunately, the terms and exclusions of what is covered with this plan for hosts make it difficult to receive reimbursement beyond minor issues. And if you search around for Airbnb insurance problems, you’ll find countless stories of homeowners who weren’t covered for their claims. One disconcerting exclusion from their liability coverage is assault and violence. If someone breaks into your home and hurts your guest, then the guest could sue you. It might not be your fault, but you’ll still need to pay for the legal expenses to defend yourself. And what if they successfully sue you for a door that wasn’t secure enough? Airbnb Host Protection wouldn’t cover this as it carries an “assault & battery” exclusion, so you’d have to cover injury claims that could very well add up into the hundreds of thousands of dollars.

Getting The Right Airbnb Insurance Company For Your Property

Not all insurance companies provide the same kinds of homeowners insurance protection. To ensure that your Airbnb property is covered, you’ll need to choose an insurer that specifically covers Airbnb short term rental property. These are sometimes known as commercial liability policies that are purchased in addition to your homeowners coverage.

However, paying for two separate insurance plans can be costly and confusing to manage. In addition, your homeowner’s insurer may drop you from your plan if they find out you’re renting out your property to a guest. Proper Insurance offers an affordable plan that covers all your needs as a property rental manager and homeowner.

An Airbnb Insurance Company Might Save You Money

With the potential of Airbnb homeowners liability issues exceeding $100,000 in damages and the real risk of fire, theft, and other property damage, having commercial short-term rental insurance is extremely important for property owners who rent out their home on services like Airbnb. Proper Insurance® offers one of the most affordable and comprehensive plans available on the market.

It replaces your current homeowners coverage and acts as your primary coverage when a guest is staying in your home. For more information on the price for Airbnb host protection insurance on your property, please try out our 5-minute online quote today.

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An Airbnb® Insurance Policy Covers What Your Personal Policies Are Not Designed To Cover

Your property is likely covered under a home insurance policy, and your vehicle under an auto policy. Both are personal insurance policies that exclude “business activity” and would likely have no coverage for an Airbnb rental. An insurance policy for Airbnb would entirely replace your current home insurance policy. It would essentially cover what your homeowners already does, plus add the business exposure found in renting on Airbnb.

Having An Airbnb Insurance Policy Helps Protect You from The Unknown

When you get an Airbnb insurance policy, it covers you from things you cannot prevent. What if an Airbnb guest slip and fell while staying at your property and claimed you liable? For this, you need coverage that would respond and defend you in court, and pay out for medical expenses and potentially punitive damages. What if an Airbnb guest accidently set fire to your home and your homeowners insurance denied the claim as the fire was the result from business activity? For this, you need an insurance policy that has building coverage to rebuild your property. When you open your doors to an Airbnb guest, you are opening yourself up to potential property damage and liability claims. Make certain you have an Airbnb insurance policy from Proper Insurance.

Hosting Your Property On Airbnb® Requires A Comprehensive Insurance Policy

Not every Airbnb host fully understands the business side of the short-term rentals. Some believe that it is their home, and they can do what they please with it. While this is partly true, it is also partly inaccurate. If you were to rent out your property on Airbnb without the Proper Insurance® policy in place, you could wind up with some very stiff consequences. Damage caused by a renter, or bodily injury from a renter could go uninsured.

Homeowner’s Insurance Policies Typically Won’t Cover Airbnb

In the clear majority of cases, a homeowner’s insurance policy is not going to cover any type of property damage or bodily injury you may have during an Airbnb rental. In fact, not only will your homeowner’s insurance likely deny any claim, but often you will be canceled. Short-term renting on Airbnb is a business transaction and you need business insurance. You need a business insurance policy that can replace your current homeowners; one that covers you while you are there, and while you have Airbnb guests.

Is It Worth Having An Airbnb Insurance Policy?

We often see property owners asking if taking out an insurance policy on their Airbnb property is worth the additional expense. The answer to this question depends on a few different factors. First, are you comfortable with taking a significant risk?

Remember, if your guest accidentally burns down your home, that’s it – there’s likely going to be no reimbursement since standard homeowner’s insurance does not cover rentals. If your home or property is worth anything, which most are, then insuring it would be a good idea.

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Don’t Neglect Commercial Liability Protection

Perhaps one of the most forgotten aspects of owning a business is liability claims protection. Even if you’re only renting out your home a couple of times a year, make no mistake, you’re running a business just like a hotel. That means if your guest were to experience a bodily injury while at your property, you could be held personally liability – even if you weren’t involved in the personal injury.

The legal expenses for liability claims alone could add up into the tens of thousands, if not more. That’s why when choosing an Airbnb insurance company, it’s important to pick one that not only provides host protection from a property damage claim but that you are covered for liability claims as well.

Airbnb Property Insurance

Airbnb’s second plan, the Host Guarantee, is a free form of property damage coverage offered to primary property owners. This plan does not cover liability and instead protects the home and some of the property within. However, this guarantee is not an insurance plan. It’s merely a guarantee by the rental platform. Like their liability coverage, the Host Guarantee is full of exclusions and holes that could leave you with a large bill. And because of the extensive number of requirements just to submit a claim, you may have trouble getting even a small amount of reimbursement.

Don’t Rely On Your Homeowners Insurance Either…

Another mistake property owners make is to rely on their homeowner’s insurance coverage instead of an actual Airbnb insurance provider. Homeowner plans are designed to cover you from property damage claims and liability based on a very specific set of circumstances that do not include rentals. This is because when you rent out your home, whether on a frequent or infrequent basis, the risk for property damage and liability claims go up significantly. Unfortunately, this is not factored into your current homeowner’s insurance plan. If an insurer finds out you’re listing your property for rent in Airbnb, they’ll often terminate your coverage and refuse to reimburse you for any claims filed. Unfortunately, most homeowners don’t realize this until it’s too late.

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Choose Proper Insurance For Your Property

Proper Insurance is a vacation host protection insurance provider that offers comprehensive coverage for both liability and property damage for hosts utilizing Airbnb to rent out their homes. In addition, Proper Insurance replaces your current homeowner’s insurance coverage for an all-in-one plan you can count on.

Airbnb Specific Enhancements

When you rent your home on Airbnb, you take on risks that are not anticipated or covered by a standard primary homeowners policy. With Proper Insurance, you get a policy specifically designed for Airbnb hosts with coverage enhancements such as theft, damage to your rental by a guest, and animal and pet liability. That’s right, you’re covered! Every Proper policy comes with $1,000,000/2,000,000 in commercial general liability that extends to amenities your Airbnb provides such as a pool, hot tub, watercraft, bicycles, docks, and much more! Get peace of mind with Proper’s Airbnb insurance.

In The Event Of A Total Loss

There are two ways that an insurer can reimburse you for a complete loss of your property. One is by using what is called an Actual Cash Value system. In this method, the cost of rebuilding your property is calculated. Then depreciation (think of this as loss of value over time) is subtracted from this cost. What this means for you as the insured is that if you are making a claim on an older property, you could be out of thousands of dollars. The other method of reimbursement is known as the Replacement Cost valuation method. In this method, the claim that is covered is equal to the amount required in today’s dollars to rebuild the property. Note there is no factoring of depreciation. As the insured, you are able to have your property completely rebuilt at no detriment to you. Proper Insurance chooses to cover our clients with the Replacement Cost method, meaning that our clients’ are issued the funds to rebuilt completely in the event of a loss.

While some property owners aren’t aware of the need for coverage, some simply don’t want to shoulder the Airbnb insurance cost for commercial liability and property damage protection. Call us to arrange Proper Insurance coverage now!

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