Airbnb Host Damage Protection: A Definitive Guide

Airbnb host damage protection should be on the list for any short-term rental property owner. When you accept a booking on Airbnb, you are essentially entrusting your property to a guest who is a complete stranger. What happens if that guest and/or their group seriously damages your property?

There are numerous in-depth writings online that mostly focus on Airbnb’s Aircover, which does include a section for Airbnb Host Damage Protection, but today, we are going to address homeowner’s insurance and how an Airbnb host can navigate and ultimately find protection with their name on it.

It’s not smart to rely solely on Airbnb’s free damage protection. After all, it’s the #BookDirect movement most hosts are trying to achieve, which eliminates Airbnb’s high booking fees!

Airbnb Host Damage Protection

Landlord Insurance DOES NOT Provide Airbnb Host Damage Protection

A big portion of Airbnb hosts in the U.S. purchase what’s called a dwelling (DP) or landlord insurance policy on their short-term rental property. It’s understandable as an Airbnb is a rental property; the shortcomings, however, is a landlord policy was never intended to cover the scope of an Airbnb or short-term rental property. The clearest view of this limitation is damage caused by a guest. It’s simply not covered.

Let’s look at it from the perspective of a long-term rental. When you lease a property to a tenant, you require a significant security deposit, and at the end of that lease, if the tenant causes significant damage, you keep their deposit and seek damages in court if necessary; you don’t call your insurance company to file a claim.

Airbnb or short-term rentals are no different. If a guest significantly damages your property, you are on your own unless you have an insurance policy that specifically covers guest-caused damage. The scary reality of Airbnb is that statistics are working against you as you are renting to multiple guests per year versus one tenant with a long-term rental, which was likely heavily screened.

Pro Tip: The Proper Insurance policy does provide Airbnb host damage protection and has no limit on damage caused by a guest.

Homeowner’s Insurance DOES NOT Provide Airbnb Host Damage Protection

Another big portion of Airbnb hosts in the U.S. purchase what’s called a homeowner’s (HO) insurance policy for their short-term rental property. Recently, it’s become very misleading as most homeowner’s insurance providers offer what’s called a home-sharing endorsement, but this endorsement is only applicable to a primary residence, not a rental property.

What happens is insurance agents hear the word “Airbnb” and immediately jump to a homeowner’s policy with a home-sharing endorsement, not realizing they are providing the wrong policy to the Airbnb host. Yes, this endorsement is fine for a primary residence but not an investment or secondary property. A home-sharing endorsement is only adequate if the property is the Airbnb host’s primary place of residence or “residence premises,” the place they get their mail, and the place they reside.

Needless to say, not only does a homeowner’s insurance policy not cover rentals, but it certainly does not provide Airbnb host damage protection, that is unless the property is your primary residence and you have a home-sharing endorsement.

Pro Tip: If your Airbnb is your primary residence, buyer beware, as home-sharing endorsements are very limited in scope and typically only provide around $10,000 in coverage, such as the Allstate HostAdvantage product. If you want comprehensive coverage, you are far better served with a commercial product such as what Proper Insurance offers.

Illustration: Wrecked short-term rental. Guest damage.

Proper Insurance DOES Provide Airbnb Host Damage Protection

With trademarked endorsements, the Proper Insurance policy is the only insurance product in the U.S. for Airbnb hosts that provides no limit on damage caused by a guest, which in turn, is true comprehensive Airbnb host damage protection.

Airbnb Host Damage Protection Coverage

Proper Insurance Policy Highlights

  • Designed to entirely replace the host’s current homeowner’s or landlord policy
  • Special form “all-risk” coverage for building(s) and contents
  • Replacement cost valuation on both building and contents
  • Actual loss sustained business revenue with no time limit
  • No limit on damage caused by a guest (Airbnb Host Damage Protection)
  • Liquor liability, animal/pet liability, and invasion of privacy
  • Optional coverage for bed bugs, squatters, equipment breakdown, and more

Airbnb Host Damage Protection FAQs

Does Airbnb cover host damages?

Yes, Airbnb offers damage protection via Airbnb Aircover; however, it is not an insurance contract; it’s a guarantee from Airbnb, which means as a host, you have no policy rights. In order to qualify for Airbnb Host Damage Protection, you must first pursue all rights and remedies you have against the responsible guest.

How much does Airbnb provide its hosts in damage protection?

Airbnb provides $3,000,000 in host damage protection via Airbnb AirCover, but it does not replace the host’s home insurance. It’s purely supplemental insurance and only applicable to bookings done through the Airbnb platform.

Is Airbnb host damage protection free?

Yes, Airbnb advertises that its damage protection is free via AirCover; however, Airbnb’s booking fees are among the highest of all OTA’s, so one must assume the overhead costs must be baked in.

Do Airbnb hosts have insurance for damages?

No, the Airbnb Host Damage Protection, which is part of AirCover, is not an insurance contract. It’s simply a guarantee with lengthy terms and conditions that state a host must first pursue all rights and remedies against the responsible guest before the guarantee will consider reimbursement.

Verify Your Insurance

Are you interested in learning how your short-term rental business could benefit from having coverage for Airbnb squatters, along with other protections such as bed bug coverage and liquor liability?

Proper Insurance is the nation’s leading short-term vacation rental insurance provider, with the most comprehensive policy on the market. We protect homes in all 50 states with unmatched coverage for your property, revenue, and business liability, customized to include guest-caused theft/damage, liquor liability, amenity liability (bikes, kayaks, hot tub, etc.), bed bugs, squatters, and more.

Give us a call at 888-631-6680 to receive a comprehensive coverage comparison. 

About the Author

Darren Pettyjohn

Darren Pettyjohn, Co-Founder of Proper Insurance, is a well-known expert and accomplished authority figure in the short-term rental insurance sector. With a rich history of pivotal contributions to the insurance industry before launching Proper Insurance, Darren's experience and expertise are unparalleled. Residing with his family in Bozeman, MT, Darren enjoys outdoor adventures like fly fishing and skiing. His professional success, paired with his personal passions, brings a vibrant approach to insurance that resonates with the short-term rental community.

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