Many short-term hosts using the Airbnb platform are familiar with Airbnb’s Host Protection Guarantee and think of it as a free insurance policy. Without a closer examination of the Terms and Conditions of the Host Protection Guarantee, one may assume that they possess adequate insurance through this program.  However, there are multiple aspects of the program that make it prudent for conscientious hosts to consider third-party insurance if they plan on operating an Airbnb or short-term rental.

Airbnb’s Host Protection Guarantee program was formulated in an effort to onboard and satisfy new and existing hosts that harbor concerns of damage to their properties. The Host Guarantee is intended to offer property damage protection of up to $1 million USD for every host and every listing – at no additional cost to the Airbnb host themselves.  Airbnb holds up the Guarantee as a centerpiece of their efforts to promote the use of the Airbnb platform, build customer loyalty and strengthen customer confidence. They claim that it represents an unmatched level of protection in the travel industry.  However, its critics claim that it promotes a false sense of security and that when push comes to shove, hosts are often left misled, exposed, and frequently subject to consequent financial loss.

In this article, you will discover these five important items that every Airbnb host needs to understand about the Host Guarantee before deciding on the extent to which they wish to rely on the protections it claims to afford:

  1. The Host Guarantee Still Specifies Limitations and Exclusions
  2. The Host Guarantee is NOT Insurance
  3. The Host Guarantee Will be Void if You Fail to Adhere to Strict Claim Submission Requirements
  4. The Host Guarantee May Be Void for Failure to Adhere to Local Laws
  5. The Host Guarantee Represents a Shared Policy with Shared Limits

1. The Host Guarantee Still Specifies Limitations and Exclusions

Even if the Host Guarantee is taken at face value, it is explicit in calling out specific things that have limited or no protection.

For example; jewelry, collectibles, and artwork have only limited protections. Cash and securities, damage caused by a pet, or damage to shared or common areas of a building that aren’t part of the listing itself has no protections at all. Ordinary wear and tear are also not protected.

Prudent hosts should consider this when deciding what personal items or home furnishings they wish to keep in their homes, and the places they choose to store them.

2. The Host Guarantee is NOT Insurance

The Terms and Conditions of the Airbnb Host Guarantee make clear that it is not an insurance policy. The T’s & C’s state:

“These Airbnb Host Guarantee Terms are not intended to constitute an offer to insure, do not constitute insurance or an insurance contract, and do not take the place of insurance obtained or obtainable by you. Furthermore, these Airbnb Host Guarantee Terms are not an insurance service agreement as defined in a standard ISO renter’s or homeowner’s insurance policy.”

In colloquial language, the terms guarantee and insurance are frequently thought about and used interchangeably. However, legally speaking, these two words mean two very different things.

An insurance policy places obligations on the offering party (i.e. the insurer) to provide remedies in the form of payouts that they are committed to providing in the event of specific triggers or events. A guarantee, on the other hand, does not commit the offering party to the same standard of obligation. A guarantee represents a grey area whereby the triggers for a payout and the extent of that payout remain largely at the discretion of the offering party.

In this operating reality, a guarantee offers a far lower threshold of certainty of outcome than its insurance policy brother. This inevitably leaves the receiving party (e.g. an Airbnb host) in a substantially more exposed and uncertain position.

3. The Host Guarantee Will be Void if You Fail to Adhere to Strict Claim Submission Requirements

To submit a claim under the Host Guarantee, a host is required to undertake each of the following steps…

  1. Contact the guest: Notify the guest of the complaint and attempt to negotiate a resolution
  2. Determine eligibility: Review Airbnb’s Host Guarantee Terms and determine if they have an eligible claim
  3. File police report: This is a requirement for payment requests in excess of $300 USD
  4. Compile documentation: Proof of purchase, ownership, and damages are required for processing the claim
  5. Submit a request to Airbnb: Claims must be submitted to Airbnb within 14 days of the guest’s check-out or before the next guest checks-in – whichever is earlier of the two
  6. Airbnb follow-up: Airbnb will send a confirmation email and follow-up emails to discuss the next steps like additional documentation required
  7. Airbnb notification of outcome: Once sufficient information has been received from both the host and guest, documentation has been reviewed and the payment request has been evaluated; Airbnb will notify the host of the outcome of their claim

As you can see, adhering to Airbnb’s strict claim submission requirements is no small walk in the park.

The stringency of obligations and time-frames is an onerous burden on hosts. Even with full knowledge of the process, adherence to these demanding timelines will already prove difficult. Most hosts remain unfamiliar with their time-bound obligations, resulting in disqualified claims simply as a consequence of time-frames not being met.

Airbnb hosts are therefore encouraged to familiarize themselves with these stringent claim submission requirements long before a time they ever need to rely on the protections afforded by the guarantee.

4. The Host Guarantee May Be Void for Failure to Adhere to Local Laws

In the ever-changing landscape of the home-sharing economy, rules and regulations are in a state of perpetual flux. These also vary from city-to-city, state-to-state, and country-to-country. Many hosts find themselves either wilfully or unknowingly blind to the local laws that impact the legality of their home sharing operations.

For example, many cities place restrictions on the number of nights that a residence may legally host guests on home-sharing platforms such as Airbnb. Some jurisdictions also require hosts to possess commercial liability or property damage insurance.

The Host Guarantee explicitly states that payouts will be reduced by the amounts already collected for the same covered losses from a source other than Airbnb (such as the above-mentioned insurance policies).

Hosts will therefore either be in contravention of their legal obligations that may nullify the protections afforded by the Host Guarantee, or possess an insurance policy that supersedes the Guarantee and renders its protections toothless in practice and outcome.

5. The Host Guarantee Represents a Shared Policy with Shared Limits

Even if construed in its most favorable light, the Host Guarantee would be a “shared” policy also for the half a million Airbnb hosts worldwide. Individual hosts are not named insureds to the entitlements of the Guarantee, meaning that any policy limits and entitlements will also be shared by all other hosts too.

If the claims of other hosts result in policy limits being reached, then your entitlement to a payout may have no bearing on the absence of a payout that ends up being made to you.

This additional grey area of discretion leaves Airbnb hosts further exposed and uncertain of their protections if push-came-to-shove.

As you can see, there is far more than meets the eye when it comes to the protections afforded by the Airbnb Host Guarantee. The Guarantee should be viewed as a complementary safeguard that sits alongside better protections you voluntarily acquire, such as short-term rental insurance policies. For hosts looking for true comfort from the specific risks posed by short-term rentals, there simply is no other alternative.

Verify Your Insurance Coverage Today 

Curious what your policy could look like with squatter coverage, bed bug coverage, liquor liability, and more?  Proper Insurance leads the Nation in short-term rental insurance, with over 50,000 policies written in all 50 states. Backed by Lloyd’s of London and exclusive endorsements from vacation rental leaders such as Vrbo, Proper Insurance is built on world-class insurance coverage. Proper’s policy covers vacation homes, townhouses, condos, duplexes, cabins, cottages, apartments, and more. With expert vacation rental underwriters, we can tailor a policy specific to your short-term rental property.

If you have questions or would like to compare your current policy to the custom short-term rental policy offered by Proper Insurance, give us a call at 888-631-6680 to receive a comprehensive coverage comparison or visit our website to submit an online quote request today!

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Evian Gutman – Author

Evian is the Founder & CEO of Padlifter – the one-stop-shop for getting found more often, winning more bookings and making more money on Airbnb. He is the author of the best-selling book ‘The Definitive Step-by-Step Guide to Making Money on Airbnb’ and is an Airbnb Superhost that has hosted over 500 guests.

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