Short Term Rental Insurance For Airbnb
Airbnb offers “free” short-term rental insurance for every booking on their platform. They have the Airbnb Host Guarantee which provides $1,000,000 of “free” property coverage and the Airbnb Host Protection which provides $1,000,000 of “free” liability coverage.
The Airbnb Host Guarantee is not actual insurance and Airbnb is quick to point that out in their marketing material. If they didn’t, we imagine they would get a lot of letters from insurance commissioners across the U.S., as insurance is a highly regulated industry. Yes, there is documentation of Airbnb stepping up and paying some property claims, but let’s be honest, if your home burns down, Airbnb is not rebuilding it. It’s your short-term rental property and you need to insure it like any other property you own.
The Airbnb Host Protection is an actually commercial liability insurance policy. However, Airbnb is the named insured and it’s entirely up to them on who gets coverage. The most alarming part is that the policy only has a $10,000,000 aggregate for the year, which means the most the policy is maxed out after $10,000,000 is paid in claims. That would only be 10 $1,000,000 claim payouts. With 80,000 bookings per night around the world and actuarial data on liability claims, the math does not add up.
Something has to give and it comes in the form of exclusions or limitations in the policy. Airbnb’s short-term rental insurance clearly excludes personal and advertising injury, assault and battery and much more. Yes, it’s there as an added layer of protection for certain occurrences, but just like property insurance, every owner needs to carry their own liability insurance policy with their name on it, not Airbnb’s!