What Is Airbnb Hosts Insurance? Do Airbnb hosts need insurance? Why?
Have you ever thought about protecting your hosting business? What do you know about Airbnb Hosts Insurance? Nothing?! Well, here is where to start!
Since running an Airbnb hosting business is one of the easiest and most delightful ways to make money (or a side income in some cases), the number of people who decide to rent out their property from time to time is incredibly increasing all around the world. But despite this growing number, only a few consider finding reliable Airbnb Hosts Insurance to protect their business from possible damages and financial losses. On the other hand, only a few insurance agencies focus on Airbnb businesses as a niche market, making it even more challenging for hosts to find a perfect insurance carrier. But why do hosts need Airbnb Hosts Insurance in the first place? Isn’t it wasting money? What kind of insurance is the perfect one for Airbnb hosts? You may ask. Well, stay tuned till the end to find all the answers!
Why It’s Essential to Have Reliable Insurance?
Most people think hosting an Airbnb is a low-risk business where they can make money without taking risks or making any investments. Most people are wrong, though! Being an Airbnb host means inviting strangers to your house, condo, or duplex to stay for days or weeks, so anything is possible! As an Airbnb host, you need to spend and invest a considerable amount of money on furniture, repair, and maintenance of your property. So it’s too hurtful when a guest accidentally or intentionally damages one of your property’s belongings. Anyway, even though hosting on Airbnb is not typically considered a high-risk job, there is always a possibility of losing money if a guest damages your property. All Airbnb hosts must have liability insurance cause they are technically running a business.
But how to choose the best Airbnb Hosts Insurance? What to look for in an Airbnb insurance policy? Don’t worry; we’re almost there, but before answering these questions, you need to know about different damages that guests might cause on your property.
Common Airbnb Damages
There are two common kinds of Airbnb damages: minor and severe ones.
However, every damage is a financial loss for Airbnb hosts, whether significant or insignificant. How to define Airbnb damages as severe or minor damage. The answer is simple. If you can easily replace or fix the damage by replacing the furniture or cleaning it, it’s a minor one. In other words, if the damage is resolvable without spending lots of money, it’s probably minor such as:
- Lime scales around the showers’ walls
- Residues of makeup products left on the bed sheets and towels
- Washable stains on the sofas, walls, or curtains
- Food and grease left on the dishes
- Dirt caused by guest’s shoes on the floor and carpets
- And minor stains on the kitchen or bathroom walls that are caused for spillage
Severe Airbnb damages include any significant problems with the walls, floors, plants, or yard and theft that make your property less safe. However, this doesn’t happen very often, and most of the time, the guests will call you as soon as they cause damage and offer to pay for it, but what if they don’t? You have to be prepared anyway. Here is where reliable Airbnb Hosts Insurance becomes essential.
AirCover is not Enough!
Most Airbnb hosts might have heard about the Airbnb hosts insurance called AirCover. AirCover is a free insurance service that introduces by Airbnb end of 2021. This service has taken the place of the old security plan for Airbnb, called “Host Guarantee.” Both services protect hosts from damage done by guests, but AirCover goes a step further by offering a host insurance program.
Airbnb hosts don’t have to pay anything to participate in the AirCover plan. AirCover plan is made to cover costs hosts must pay for, like repairs or deep cleaning. Before the AirCover program, the insurance for the Host Guarantee program only covered property damage caused by guests.
To use Airbnb’s insurance services, you must follow all the rules set by your owner or condo association. In some places, zoning rules, business licenses, and extra property fees may all be needed. If you don’t follow these rules, you might be unable to use Airbnb’s insurance benefits. On the other hand, Airbnb itself stated, “However, AirCover can help keep you safe while hosting an Airbnb stay or Experience, but it is not a replacement for personal insurance.” So, AirCover is not enough!
Can Regular Home Insurance Protect Airbnb Hosts?
A homeowner’s insurance policy is intended to protect a private home, not a commercial building or rental. What distinguishes an Airbnb from a residential property or a long-term residential property is short-term rentals. Guests pay hosts to stay at their homes for fewer than 30 days. Exactly like a Hilton or a Marriott, it’s a micro-hotel. So, it’s business, and as such, it must comply with all hospitality regulations. Regular homeowner’s insurance won’t protect an Airbnb rental from every possible risk. Many insurance companies have tried to include Airbnb properties in their standard homeowner policies, yet Airbnb is a commercial business. So, sticking to your homeowner’s insurance policy while listing your property on Airbnb doesn’t sound so wise.
What to Look for while Searching for an Airbnb Insurance Plan?
There are certain factors you have to pay attention to when you’re looking for the best Airbnb Hosts Insurance. Here are these features to look for in an Airbnb insurance policy:
- Loss of Income – Find an insurance policy that compensates you if you cancel your Airbnb bookings due to unexpected occurrences. Renovation, neighboring construction, and catastrophes are all probable causes of this disruption. Most landlord policies only cover “loss of rent” up to the average renting income in your area, but the “loss of income” clause will cover the higher income from short-term rentals.
- Property and Contents Insurance – Another thing to consider is keeping everything that comes with your Airbnb property safe. This includes furniture, clothing, and other stuff like that. Find a policy that will reimburse you for replacing or fixing property belongings.
- Liability Coverage – Imagine that one of your Airbnb guests has just fallen down the stairs or slipped on some soap scum in the bathroom. You should have comprehensive liability coverage if a guest is injured while staying at your property.
- Location-Specific Coverage – Your property might be located in a region at risk for flooding, earthquakes, and other calamities of the natural world. Your insurance policy should cover property damage and income loss due to repairs.
- No Forced Entry Requirement for Damage or Theft – Most standard homeowners, landlord, and commercial insurance policies all require evidence of entry by force in the case of a theft. Try to find an insurance plan with a specific provision that exempts you from proving a break-in.
As a rental property owner, you can never be too cautious about your guests. Even the most well-behaved guests might leave you with unwanted repair bills or file a claim against you for any minor or severe injury they’ve got while staying at your place. Although AirCover provides adequate protection against interior damages and some liability, it is insufficient for year-round use. Getting insurance when the residence is unoccupied between bookings would also be best.
So it’s essential to protect your business and property by choosing the most comprehensive Airbnb Hosts Insurance. Please share your related experiences and questions in the comment section below.