Accidents happen. A guest slipping on the stairs and breaking their arm can be financially devastating for a short-term rental host if their business isn’t adequately protected. That’s where Airbnb insurance comes into play.
While Airbnb offers protection for hosts, you might be surprised to learn that’s it’s simply not enough. This guide will discuss what coverage Airbnb provides, what third-party providers should consider, and how Short Turns Airbnb Management can help.
What is Airbnb Insurance?
AirCover is a program designed to provide insurance for Airbnb hosts. It protects hosts from third-party claims and property damage caused by guests. This protection plan is automatically included for all hosts and ensures peace of mind by covering a range of potential issues. The two plans available are Host Liability Insurance and Host Damage Protection.
Airbnb Insurance: Host Liability Insurance
Host liability insurance protects hosts from claims made by guests, cohosts, and cleaners for bodily injury or property damage. The Host Liability Program covers up to $1,000,000 per stay. Examples of claims accepted include:
Physical injury
Damage or theft of a guest’s property
Damage caused by a guest to common areas (i.e., the lobby of an apartment building)
However, it’s important to note a few items that the host liability protection doesn’t cover, such as:
Any damage done intentionally by a guest
Damage to the host’s property or personal belongings
Criminal activities
Electronic data
Acts committed by intoxicated minors or adults
Airbnb Insurance: Host Damage protection
Host Damage Protection covers up to $3,000,000 in damages to the host’s property caused by guests. This element of Aircover for hosts includes coverage for:
Furniture and appliances
Income lost due to having to cancel confirmed bookings because of damage caused by a guest
Extra cleanings due to extreme guest messes
Damage to parked cars, boats, or other vehicles
Items that aren’t covered include:
Normal wear and tear
Loss of currency
Acts of nature
Guest injury
War
Mold of fungi
How Does Airbnb Insurance Compare to Vrbo Insurance?
Airbnb offers more robust coverage options than Vrbo. One of the standout differences is in damage protection. As stated above, Airbnb offers up to $3,000,000 in damage protection to the host’s rental property.
Vrbo doesn’t offer any automatic damage protection for hosts. Instead, they must file a damage deposit claim against their guests. However, this isn’t very effective, and most hosts must purchase third-party insurance.
However, Airbnb and Vrbo provide up to $1,000,000 in liability insurance. While both platforms offer a comparable level of protection against a liability claim, Airbnb excels in terms of property damage insurance.
Feature | Airbnb AirCover | Vrbo Insurance
Property Damage Protection | Up to $3,000,000 | No damage protection through Vrbo
Liability Insurance | Up to $1,000,000 | Up to $1,000,000
Coverage for Furniture and Appliances | Yes | Must purchase through a third-party provider
Coverage for Lost Income | Yes | Must purchase through a third-party provider
Extra Cleaning Costs | Yes | Must purchase through a third-party provider
Vehicle Damage (Parked Cars, Boats) | Yes | Must purchase through a third-party provider
Normal Wear and Tear | No | No
Loss of Currency | No | No
Acts of Nature | No | No
War | No | No
Mold or Fungi | No | No
Does Renters Insurance Cover Airbnb?
Renters’ insurance might not cover damages or losses related to short-term rentals. Renters insurance generally protects your property if you only rent it out occasionally. This means you are not covered for regular business use of your rental space, such as hosting an Airbnb.
If you try to file a claim for damages or losses that occurred while your property was rented out on Airbnb, it will most likely get denied. This is because most renters insurance policies only provide coverage for personal belongings and liability within the confines of the rented property, not for short-term rentals.
Is the Airbnb Damage Policy Sufficient?
Airbnb’s damage policy isn’t enough alone. While promising, Airbnb’s damage policy has limitations, and real-life hosts complain about its reliability and effectiveness. See these complaints for yourself in the Community Center.
Additionally, below are some common concerns that hosts have frequently expressed:
Difficult claims process: Many hosts report that the claims process is cumbersome and not user-friendly.
Delayed payouts: Even when claims are approved, the disbursement of funds can be significantly delayed and cause financial strain for hosts.
Risk of bad reviews: Hosts often worry about receiving negative reviews from guests when they attempt to claim damages that could affect future bookings.
Additionally, AirCover doesn’t kick in until hosts have tapped into guest deposits or failed to collect additional funds from guests. As a result, hosts need to consider an additional policy. Many hosts build the costs of their third-party coverage into their nightly rate or tack on an additional fee to cover the added expenses.
A Few Carriers that Offer Damage Protection Policies
A few popular carriers specialize in offering damage protection policies tailored specifically to short-term rental properties. These policies can provide coverage beyond what Airbnb’s damage policy offers. Below, we highlight some respectable providers:
1. Safely
Safely is one of the most preferred choices for damage protection among hosts. This insurance company offers a range of coverage options, including accidental damage, theft, vandalism, and more.
Pros:
High coverage limits: Offers up to $1,000,000 in guest-caused structural damage and liability
Protects personal property: Covers up to $25,000 for property contents
Offers additional guest screening services: Safely offers add-on features that provide background checks on guests to reduce the risk of damage and poor behavior.
Cons:
Cost: Premiums can be higher than those of other insurance providers.
2. Waivo
Waivo is another leading damage protection provider that offers customized coverage options for hosts. Their plans are designed to protect your property, personal belongings, and reputation.
Pros:
Automated claims process: Streamlined claims process for quick resolution.
Affordable: Their pricing is volume based. The more bookings you have, the better the rate.
Cons:
Coverage limitations: Only covers $500-$20,000 in guest-caused damage protection. Liability insurance extends to $1,000,000.
3. Superhog
Superhog guarantees to protect your property against guest-caused damages, theft, and other incidents. They also provide additional services such as noise monitoring and rental fraud detection.
Pros:
Global coverage: Available for properties in over 25 countries.
Comprehensive protection: Guest screening and ID verification is available
High coverage: Provides hosts with up to $5,000,000 in damage protection
Cons:
Complex pricing structure: It might be harder to predict total costs without detailed quotes.
No liability insurance: Unfortunately, Superhog doesn’t provide additional liability coverage.
4. RentalGuardian
RentalGuardian is a damage protection provider that offers affordable and customizable coverage options. They provide additional services such as travel insurance options for guests.
Pros:
Strong damage protection: Allows up to $1,000,000 in damage and personal injury lawsuit protection.
Broad coverage: Offers extensive protection, including $15,000 in bed bug protection and $1,00,000 in liability insurance.
Cons:
Higher premiums for some locations: Costs can vary greatly depending on the property location.
Does Homeowners Insurance Cover Airbnb Rentals?
Technically, no. Most traditional home insurance policies do not cover vacation rentals.
Some carrier policies may even contain language suggesting the entire policy is void if the home is used for business purposes. If you rely only on a standard homeowners insurance policy, you might find yourself unprotected and left out to dry. If you’re a homeowner with a mortgage, you must find insurance that covers Airbnb rentals.
Companies that Offer a Comprehensive Airbnb Insurance Policy
Unlike a traditional homeowners policy, specialized insurance policies cater to the unique risks associated with short-term rentals. Below are some companies that offer comprehensive Airbnb insurance policies tailored to meet these needs:
1. Proper
Proper provides tailored insurance solutions for short-term rentals, addressing common gaps found in traditional policies.
Pros:
Proper was created specifically with short-term rental hosts in mind
Provides squatter protection
Offers liquor liability
Up to $1,000,000 in liability protection
No limit to host damage protection
Cons:
No easy bundling options
2. Steadily
Steadily specializes in short-term rental landlord insurance with customizable plans to suit various needs.
Pros:
Includes fire and water damage
Covers medical bills for guests
Protects from damage caused by riots or civil commotion
Packages are customizable but generally provide up to $1,000,000 in coverage
Cons:
Homes in Florida and California face higher costs
3. Erie Insurance
Erie Insurance offers dedicated home-sharing insurance policies that supplement standard homeowners insurance. Their coverage options are designed to protect against property damage and liability specific to short-term rentals.
Pros:
Plans are flexible but generally range from $100,000 to $1,000,000 in liability protection
Affordable, with average prices ranging from $40-$60 per year when added to your homeowner insurance
Cons:
Only available in select states
4. Fudge Insurance
Fudge Insurance covers various risks, including property damage and liability, ensuring that your rental business remains protected against unforeseen incidents.
Pros:
Offers between $1,000,000 to $2,000,000 in liability protection
Provides damage protection for appliances and furniture
Bundling options are available
Cons:
Some customers have commented on slow customer service response times
Benefits of Local Professional Airbnb Management
Professional Airbnb management companies, like Short Turns, help owners find the best Airbnb insurance policy by working with the top brokers in the industry who can save you time, money, and headaches. Additionally, Short Turns will keep your property safe and secure through advanced guest screening and collecting deposits. Finally, whether a reservation comes in through Airbnb, Vrbo, or your direct booking website, Short Turns has you covered.
Pro Tips
Choosing the right insurance policy for your Airbnb rental can be a complex process, but by following a few expert tips, you can rest easy knowing that your property is secure. Here are some essential strategies to help you navigate Airbnb insurance:
Collect an Airbnb Security Deposit: Always request a security deposit from guests to cover any potential damages that might occur during their stay. This provides a financial safety net and encourages guests to treat your property with care.
Find a Broker: Work with an experienced insurance broker who specializes in short-term rental policies. A broker can help you navigate the complexities of insurance products and find the coverage that best suits your needs.
Shop Around: Don’t just settle for the first policy you come across. Shop around to compare different carriers, their rates, and the breadth of their coverage options.
Focus on Details: When looking for insurance options that cover rentals, pay close attention to the specifics of what’s covered and what’s excluded.
See if You Can Automate It: Some damage protection carriers offer integration with property management software, which can automate the entire process. Check if your preferred insurance provider connects with your property management software to streamline your workflow.
Bed Bug Coverage: Keep an eye out for policies that cover bed bug infestations and loss of income during the remediation period.
FAQ
Does renters insurance cover Airbnb?
Renters insurance does not cover Airbnb rentals as it is designed for permanent residences and not short-term rentals. Hosts must purchase specific short-term rental insurance.
Is Airbnb insurance worth it?
Investing in additional Airbnb insurance is a necessary expense to protect your property and yourself as a host. It can cover damages, liability claims, and loss of income due. Airbnb Aircover is not enough protection alone.
What kind of insurance do you need for Airbnb?
Hosts need a combination of insurance policies to protect themselves and their property. This includes liability insurance, damage protection, loss of income coverage, and potentially even bed bug coverage. Working with an experienced insurance broker can also help hosts find the right coverage for their specific needs.
Are Airbnb owners insured?
Airbnb hosts are automatically enrolled in the AirCover program. This program provides up to $1,000,000 in liability coverage and $3,000,000 in damage protection. However, depending on the specific situation, this may not be enough protection.
What if a guest damages your Airbnb?
If a guest damages your Airbnb, you may be covered by AirCover. However, situations like intentional damage or acts committed by intoxicated individuals require supplemental coverage.
What does Airbnb Aircover cover?
Airbnb Aircover covers up to $1,000,000 in liability coverage and $3,000,000 in damage protection. It includes incidents like damage to the host’s property, physical injury of a guest, damage caused to common areas, and income loss due to having to cancel future bookings because of guest damage.
Are Airbnb hosts liable for injuries?
Airbnb hosts can be held liable for injuries that occur on their property. This is why having liability coverage is a necessity for hosts. If a guest or visitor gets injured while staying at an Airbnb, the host may be responsible for medical expenses and other related costs.
How much does Airbnb host insurance cost?
AirCover is a free program for Airbnb hosts. However, additional insurance coverage is recommended. The cost of third-party coverage can vary depending on factors such as location, property size, and level of coverage but generally ranges from $500 to $10,000 per year.
Key Takeaways
Ensuring you have adequate insurance coverage through Airbnb’s AirCover program and additional third-party insurance is vital for protecting yourself and your business. Be sure to have a firm understanding of what AirCover provides, recognize the potential gaps in coverage, and look for additional options to fill those gaps.
With the help of a professional Airbnb management company like Short Turns, hosts can navigate the complex world of insurance and minimize risks to their property and guests. Don’t wait until an incident occurs – take proactive steps to protect yourself and your Airbnb business today!