A lawsuit was recently filed after a California homeowner was denied reimbursement by her homeowner’s insurance company as the result of an Airbnb listing.
According to the lawsuit, Emily Richer filed a property damage claim with Travelers Insurance after a 120-foot tall tree fell onto her roof causing up to $120,000 in structural damages. Her insurance company denied the claim after they learned that she rented out her home on Airbnb.
Even though the damage did not occur during the Airbnb rental, the fact that she violated the rental exclusion section of her insurance contract was enough for Travelers Insurance to deny reimbursement.
Why Homeowner’s Insurance Doesn’t Cover Short-Term Rental Properties
Unfortunately, standard homeowner insurance plans don’t cover short-term property rentals. This is because short-term renting out a property is considered a commercial activity that falls under the business exclusion section of your contract. Commercial activities like Airbnb or Vrbo property rentals have their own set of calculated risks or exposures that standard homeowner’s insurance carriers don’t have factored in the coverage or premiums.
Services like Airbnb and HomeAway have made it easier than ever for homeowners to rent out their property without jumping through the legal hoops required to own and manage a hotel. But this ease of use has led to many property owners neglecting the fact that despite how simple services like Airbnb are to use, you still have many of the same responsibilities and risks that an actual hotel business has.
That means having reliable commercial vacation rental insurance intact before you list your property for rent is extremely important whether you rent out your property a few nights or regularly throughout the year.
Quote Your Short-Term Vacation Rental Today
Interested in a policy to protect you and your business from liability and damage claims? Proper Insurance leads the Nation in short-term rental insurance, with over 40,000 policies written in all 50 states. Backed by Lloyd’s of London and exclusive endorsements from vacation rental leaders such as HomeAway and 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.