Renting your home through a sharing platform like Airbnb is a great way to make some extra money, especially if you have a vacant guest house or an empty vacation spot. But before your first reservation is booked, it’s important to have the right type of insurance to protect you and your guests. This is especially true if you’re renting your home during COVID-19. In this article, we’ll go over the best insurance for Airbnb and other rental sites.
Does homeowners insurance cover Airbnbs?
Your home insurance policy probably extends to Airbnb rentals if you rent the home infrequently, like once every few months. Based on your policy, any property damage, theft, liabilities or vandalism would be covered by insurance. However, you would need to notify your insurance company each time you had guests to confirm your coverage.
If you’re planning to rent your property on Airbnb year-round, it’s a different story. Technically, you would be operating a business out of your home, and home insurance policies don’t cover properties used for business purposes.
According to insurance and financial expert, Laura Adams, “If you’re thinking about renting out your home or investment property on a home-sharing site, such as Airbnb, you’ll need to reevaluate your insurance. Using your property for business purposes is something your insurer needs to know about, so never hide it from them.”
Many Airbnb hosts choose to purchase coverage through the Airbnb company, which ensures there aren’t any gaps in coverage. “In some cases, if you only have an occasional, short-term rental, you may be covered by an existing home insurance policy. But it’s more likely that you’ll need Airbnb coverage as a host, in addition to additional insurance for running a business from home,” says Adams.
What does Airbnb’s insurance cover?
Airbnb offers two types of private insurance—Host Guarantee and Host Protection Insurance. Both policies are designed to protect hosts and renters. Here’s what they each cover.
Host Guarantee will reimburse you for up to $1,000,000 if a guest damages the inside or outside of your property, including personal belongings and appliances. It does not cover bodily injury to guests or other people, or third-party property damage. Here’s what Host Guarantee covers:
- Damage to your home that is caused by guests.
- Damage to your personal belongings that is caused by guests.
- Damage to your home or personal belongings that is caused by a guest’s service animal.
Host Protection Insurance
Host Protection Insurance is essentially Airbnb liability insurance. It offers bodily injury liability coverage in the event that a guest gets injured on your property during their stay. It offers up to $1,000,000 in coverage, which can be applied to medical payments, legal fees and settlements. Home Protection Insurance does not offer any protection for your physical property. Here’s what it covers:
- Bodily injury liability for guests and other people.
- Property damage coverage for guest’s personal belongings.
- Property damage in common areas, like building lobbies, which are caused by a guest.
Where to find insurance for Airbnbs
If you don’t want to rely on Airbnb insurance coverage, you can also find home sharing insurance from private providers. Here are several providers that sell Airbnb insurance:
- Allstate HostAdvantage
- Proper Insurance
- Progressive Homeshare
- Liberty Mutual
Some insurance companies sell standalone home sharing policies, while others offer endorsements for your homeowners insurance. “Depending on your insurer and home state, you may need a home-sharing rider added to your home policy. Or it may be more cost-effective to have a separate commercial insurance policy. Before you have your first guest, speak with your insurance company, and make sure you won’t have any coverage gaps that put you at financial risk,” suggests Adams.
Before you buy an Airbnb insurance policy, it’s also important to make sure you’re getting enough coverage. Adams adds, “Having strangers staying in your property means an increased risk of theft, damage, and liability. If you don’t have enough insurance and a guest gets injured, you could get involved in a lawsuit and be responsible for expensive medical costs.”
What about other rental sites?
If you rent your home through a site other than Airbnb, you’ll still need to have some type of short-term rental insurance. Here are the types of insurance that other popular home sharing platforms recommend:
- VRBO: VRBO suggests that all hosts purchase a vacation rental policy, specifically through Proper Insurance. Their vacation rental policy covers the home when a guest is staying there, when the owner is staying there, and periods when the home is not rented.
- FlipKey: FlipKey doesn’t offer its own insurance policy for hosts. Instead, it suggests that hosts purchase their home insurance from a company that also offers a home sharing endorsement.
- Onefinestay: Onefinestay has an insurance policy for hosts that is underwritten by a Lloyd’s of London syndicate, which covers property damage, theft and damage. It’s available to all hosts for free.
Frequently asked questions
What other types of insurance should I consider for my Airbnb?
Whether you have Airbnb home insurance through the company itself or through your home insurance provider, you will likely still have some gaps in coverage. For instance, if you’re renting a home in California, you should strongly consider purchasing an earthquake insurance policy.
The same goes for homes in flood-prone areas, especially properties near a beach. Look into a flood insurance policy from your home insurance provider, or buy one from the National Flood Insurance Program (NFIP). Just make sure the coverage extends to rental homes.
Is Airbnb insurance automatically included when I sign up?
No, Airbnb’s insurance policies are not automatically included when you sign up to be a host. Host Guarantee and Host Protection Insurance cost extra, so you’ll need to pay for those policies upfront before you start renting.
Do my guests need to have renters insurance?
No, your Airbnb guests don’t need to have a personal renters insurance policy. However, it’s certainly beneficial. With renters insurance, your guest’s personal belongings are covered anywhere in the world, including in a hotel or Airbnb. Renters insurance also includes property damage and liability coverage, which can apply to situations that occur in a rental home.