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Vacation Rental Management

Airbnb Insurance - Vacation Rental Guide

A key concern for short-term rental property owners has always been the risk of liability claims being issued against them. This essentially means third-party claims that can relate to someone becoming injured or property damage occurring. 
Most homeowners and property managers always have adequate insurance in place to cover such situations. Due to the wide reach that comes with listing a property on Airbnb it only makes sense to strengthen the protection, as regular insurance policies may not cover the rental aspects of the property and potential guests’ damage. While it is always recommended to have third-party insurance covering your property, Airbnb too offers the “Airbnb Host Protection Insurance” to cover its listings around the world. This article talks about everything you need to know about the Airbnb Host Guarantee and Host Insurance.

Airbnb Host Protection 

Airbnb offers host protection in the form of primary insurance protection which is comprised of liability protection for up to $1 million USD.  
It cannot be stressed enough how important it is to have proper insurance coverage for your vacation rental business the Airbnb Host Protection insurance gives you additional protection concerning your Airbnb dealings. If an incident occurs during a guest’s stay, then the Airbnb insurance will provide the primary coverage for the costs that qualify, as opposed to you having to rely on your regular insurance provider.  
It must be stressed that this is ONLY applicable to claims that occur in Airbnb listings during the course of the time a visitor is using the property.   

What is NOT covered by the Airbnb Insurance Cover? 

Just like other property insurance policies, there are some types of damages and situations that are not covered by Airbnb. Below is a list of liabilities that are excluded from the Airbnb Host Protection Insurance Program.  
  • Intentional Acts – such as “Assault and Battery,” and “Sexual Abuse or Molestation” – (by the host or any other insured party) 
  • Acts of Terrorism 
  • Personal and Advertising Injury 
  • Loss of Earnings 
  • Product Liability 
  • Communicable Diseases 
  • Pollution 
  • Fungi or Bacteria 
  • Chinese Drywall 
  • Asbestos, Lead, or Silica 

How much does it cost to be part of the Airbnb Host Protection Insurance Program? 

As you are automatically agreeing to be covered under this insurance when you list a property on Airbnb the Host Protection Insurance program of $1 million USD is automatically put in place at no additional cost for you.  
Airbnb obtains a policy through a leading insurance provider and pays the insurance premiums. If you choose to make a claim, it is taken care of by a claims adjustor as mandated by the policy agreement. 

The Airbnb Host Guarantee 

If you stop to think about it, allowing strangers to stay in your property comes with quite a few risks, and the internet is filled with “Airbnb Horror Stories” that could have you rethinking your decision to host. However, by introducing the Airbnb Host Guarantee the vacation rental giant has helped realize that some of these risks can be greatly reduced. 
For the most part, users of the platform are quite responsible especially due to the collection of damage deposits and the ability of hosts to review and blacklist them if things go south. This, in itself, reduces the risk of property damage. Nevertheless, there is a chance that you could end up hosting a troublesome guest and this is exactly the reason why Airbnb has put the host guarantee in place. 
Due to the risk factor involved, property managers and owners are always on the lookout for additional ways to cover their property and to reduce the costs of damage. This program by Airbnb helps with protection against damages and automatically covers hosts on Airbnb free of charge. It consists of USD $1,000,000 worth of protection, giving every proprietor some much-required peace of mind.  
Disclaimer: This does not mean that hosts can opt to rely solely on the Airbnb Host Guarantee and Airbnb Host Protection without investing in third-party insurance. The protection programs that Airbnb is offering are to be used in addition to regular property insurance.

What is covered by the Airbnb Host Guarantee? 

The host guarantee is in effect regardless of where you may be renting your property from even if you host remotely. There are detailed rules and regulations as to what this extra insurance will cover. It is up to you as a host to independently check these out so you have a clear understanding.  
In most cases, guests tend to abide by the house rules you set and try not to damage your property. However, in the odd circumstance of damage occurring, even if it was unintentional that the Host Guarantee program kicks in.

What is NOT Covered by the Airbnb Host Guarantee? 

Just like the Host Protection Program, there are a few conditions that the Host Guarantee does not cover. Listed below are the exclusions to the program: 
  • Cash and securities 
  • Pets 
  • Personal liability 
  • Shared or common areas 
Whenever you are renting your home to guests, think about the risks that come with it, and remove any valuable, irreplaceable items such as jewelry, original and collectors’ pieces and consider introducing a security deposit to the price you charge.

What can you do to reduce the risk of damage and stolen property? 

In an attempt to make your accommodation is appealing to a guest you may see the need to decorate it with artwork and other ornaments. The best step to take here is not to use expensive artwork for decoration purposes. If there are expensive pieces of art in the rental home, then it might be a good idea to remove them and replace them with less valuable ones.  
The host guarantee may offer limited protection for artwork, collectibles and jewelry. However, it is quicker and easier to remove anything expensive lying around the house before a traveler arrives than to make claims and try to recover lost goods especially if you have any sentimental attachment to them. 

Making a claim on the Host Guarantee program. 

The process of making a claim against the Host Guarantee is quite straightforward and there are a few ways that hosts can go about it. 
If the claim made appears to be a case of emergency the relevant authorities should be contacted before contacting Airbnb’s customer support. When submitting a claim timing is of utmost importance. It has to be done no later than fourteen days after the guest has checked out of the building. Or, before the next customer is going to check in, whichever comes first. 
Once the claim has been submitted then Airbnb personnel will work with the host to carry out the payment process. 
In other cases, you can negotiate with the guest for a settlement instead of submitting a claim. In this case, no further action needs to be taken. 

The Key Difference between the Airbnb Host Guarantee and the Host Insurance 

It is important that the Host Guarantee is NOT an insurance program. It is an extra program offered to homeowners in order to help prevent loss from property damage that may occur to the host’s personal property by Airbnb guests. 
Both programs provided at no charge, are aimed at giving hosts confidence to rent out their properties. In addition to these programs, hosts are also advised to have a damage deposit set so that guests will be careful with how they handle the property and provide protection of a more minor nature.  

In conclusion: 

Both programs were introduced by Airbnb in a bid to give the added assurance they are adequately protected are automatically activated when you start hosting on Airbnb. They are aimed at easing the discomforts that property owners have about renting out their spaces on Airbnb and how it will affect their existing home insurance.  
Are you looking to start hosting or to expand your vacation rental portfolio? Request a free demo to find out how we help hosts around the world. 

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