One of the biggest concerns for homeowners is opening their homes up to complete strangers – time and time again! The good news is that, as the industry grows, innovative tech-driven solutions are entering the short-term rental market offering homeowners and property owners a new level of insurance cover to protect their financial investments, owner and guest relationships, and vacation rental business overall.
A standard homeowners insurance policy covers your property as a primary residence, however operating as a short-term rental adds an increased risk with absent property owners, more foot traffic, and guests unfamiliar with the home. The moment your home is advertised as a rental and booked (for even one night), you are considered a “short-term” rental business and the “business activity exclusion” on your homeowner’s policy will kick in – it is highly unlikely any claim related to a short-term stay will be covered by your homeowner’s policy.
The mainstream OTAs and vacation rental sites do not require you to have insurance to list, but damages and accidents can (and do!) happen, potentially resulting in a costly lawsuit. A bulletproof damage and liability insurance policy designed for short-term rentals is a worthwhile and smart investment to give homeowners peace of mind, protect your business, and maintain good relationships with your homeowners and guests.
Each vacation rental business is unique however, regardless of the size of your business and number of properties managed, damage waiver fees, OTA insurance coverage, and host protection policies should not be relied upon for protection for any short-term rental business.
An Outline of Airbnb’s Aircover Protection
Airbnb is one of the most trusted online vacation rental sites with over 7 million worldwide listings, 2.9 million hosts, and an average of 14,000 new hosts joining the platform each month – many relying on Airbnb’s Aircover to protect their homes and guests – a false sense of security until a situation arises!
The first thing to note is AirCover is NOT an insurance policy! AirCover is a rebrand of Airbnb’s Host Guarantee and Host Liability Protection claiming “top-to-bottom” protection with a few added benefits.
AirCover is NOT sufficient as your only line of defense should a claim arise from a guest stay, and Airbnb clearly states it is not a substitute for insurance coverage.
“While AirCover protects you while you’re hosting an Airbnb stay or Experience, it is not a substitute for personal insurance. Since everyone’s situation is different, you should talk to your insurer to see how, or if, your policy overlaps with AirCover.”
Airbnb hosts should also note that damage and liability protection is limited to the Airbnb platform, the host is at no point named as the insured (ultimately no legal rights), and Airbnb has the final say as to whether they process or reject a claim.
“These Host Damage Protection Terms are not intended to constitute an offer to insure, do not constitute insurance or an insurance contract, and do not take the place of insurance obtained or obtainable by you. Furthermore, these Host Damage Protection Terms are not an insurance service agreement as defined in a standard ISO renter’s or homeowner’s insurance policy.”
What’s included in Airbnb’s AirCover:
AirCover is free for all Airbnb hosts and is automatically included in every reservation made on the Airbnb platform. Here’s what’s included in Airbnb’s AirCover:
- Up to $1 million Damage Protection: This includes proven damage caused to the structure of your property or personal belongings by an Airbnb guest, invited friend, or a guest’s pet.
- Up to $1 million Liability Protection: This includes liability coverage if the host is found legally responsible for bodily injury to a guest, damage to or theft of guest property, and damage caused by a guest to common areas or a nearby property. Legally responsible means the only way AirCover will cover the host is if the guest sues!
- Pet Damage Protection: In a push to promote pet-friendly travel and decrease pet fees, Airbnb have added pet damage protection to their $1 million damage protection.
- Deep Cleaning Protection: Again, in the hopes to control the rising costs of cleaning fees, Airbnb have added unexpected cleaning costs and deep cleaning expenses to their damage protection.
- Income Loss Protection: Any income lost from canceled bookings due to damage (Airbnb bookings only!) will be reimbursed to the host by Airbnb.
What’s NOT included in Airbnb’s AirCover:
AirCover offers low level protection while you’re hosting an Airbnb stay only and does not protect your short term rental business from a lawsuit, and only protects the Host from a guest’s medical injury if the Host is found liable for the cause of injury. There are many exceptions and exclusions within AirCover’s Host Damage Protection and Host Liability coverage, so we suggest you read the small print to understand what’s NOT included in Airbnb’s AirCover.
AirCover is NOT a primary no-fault policy - meaning hosts will need proof of ownership, proof of loss, and proof of innocence, along with detailed documentation and evidence to support their claim. The first step is for the host to persuade the guest to pay for the damage, only then does Airbnb step in with the discretion to close a claim if not enough PROOF! Not ideal for the guest experience or relationship!
“Airbnb agrees to pay you, as a Host, whenever the Responsible Guest fails to do so, to repair or replace your Covered Property damaged or destroyed as a result of a Covered Loss, subject to the exclusions, limitations, and other terms and conditions of these Host Damage Protection Terms.”
Primary No-Fault Insurance Cover for the Vacation Rental Industry
InsuraGuest’s no fault insurance coverage is an innovative digital insurance solution streamlined to fully protect your hard-earned and loyal guests during their stay, your rental properties from damage, and your valuable homeowners and vacation rental business from potential legal action, regardless of who is at fault.
What’s included in InsuraGuest Vacation Rental Insurance:
- $25,000 Accidental Medical Insurance
- $25,000 Property Damage Insurance
- $2,500 Personal Property Insurance
- $5,000 Accidental Death & Dismemberment Insurance
At the click of a button, InsuraGuest’s affordable no-fault insurance coverage integrates with your property management software the policy automatically attaches to each reservation, simplified digital claims are made directly from your PMS dashboard, and reimbursements are fast with no questions asked!