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I don’t know how insurance works in the US but in the UK there are quite a number of companies that provide specialist insurance for short term lets and some that provide specialist insurance for Airbnb type lets.
There are others that will provide a bolt on to existing home insurance cover.
I think the issue you mention @chicagohost is where hosts contact their insurance companies who have domestic home insurance and when their insurance companies find out that they are letting their property out on a commercial basis, contrary to the terms of their existing policy, the insurance company cancel the policy.
This would be similar to if you have car insurance for domestic use and then decide to use your car for commercial purposes your insurance wouldn’t then be valid.
My advice to any host is to find out before they start Airbnb about commercial policies covering short term lets through an insurance broker or online and then switch before they start to let out their property on a commercial basis.
With hotels and motels losing customers they may pressure states to require all STR’s to carry the same commercial insurance they must have to remain in business.
Renters may also get wind of the lack of liability insurance for STR’s and ask to see proof of coverage (certificate of insurance, it’s called) before staying at your rental.
@Cresentwrench, I’m having a hard time pinning down your issue here. There are companies that provide insurance, the issue is cost. If you aren’t comfortable with hosting without insurance, then get it. If you can’t afford it then don’t host. It’s been over a year since your first post on this subject and you still haven’t started hosting. But your posts seem to be more worried about other people than yourself.
There are tens of thousands of government jurisdictions in this country so the requirements from place to place are and always will be patchwork. The pressure of the hotel and insurance industries is real but it could take years to implement.
Renters asking for proof of insurance is not a threat to Airbnb.
If I had insurance and had to raise my price to cover it it would annoy me to no end that some people didn’t have it and so had a price advantage. Other than that whether or not a fellow host has insurance isn’t of interest to me.
Here’s what should be done. We all seem to agree we do not fully trust Air to save our collective behinds should something serious happen. If we can agree on that then we should all push for something better.
Proper uses Lloyds of London, who is willing to write coverage for STR’s where other companies will not. Air should provide each host a 1,000,000 liability package through Lloyds. Since they have tons of hosts in their system they would get a very good rate just based on quantity. Only something like 7% ever file a claim. There is good money to be made or insurance companies would not be in business very long… and Lloyds has been around for 325 years.
For small hosts, this might add a few $$ to each rental or, if you rent many days a month, you could opt for a 1 year rate. It still should be way less than each of us going it alone and we would be able to sleep at night knowing we were covered by a reputable third party insurer… and not Air.
Providing us the option would be great. Then hosts that opt in can proudly display the “insured” badge.
I can see that they eventually will push the insurance off onto us. They will probably also require background checks. And eventually we will all have to be inspected and licensed in our jurisdictions.
Luckily I think I’ll be old enough to quit Airbnb by then.
Brilliant. Currently Airbnb acts as a reportedly very erratic “claims adjuster” because it, not the hosts, are the insured. And how about that guest travel insurance product while they’re at it?! i wonder if there is an Air “control the guest experience” value blocking this, or some strategic analysis that indicates providing access to third party insurance products would hasten imposition of requirements for hosts to be insured, leading to fewer hosts due to those costs, leading to lower revenues. The Airbnb help article says it is “a good idea” to let your homeowners insurance provider know about rental activity, but there is no warning about potential loss of coverage due to that activity. Platform-based businesses’ original business model was to outsource all risk to users, but we see that evolving with regulatory and traditional business pushback. Fascinating to observe, annoying if you are personally affected.
“The Host Guarantee Programme isn’t insurance and doesn’t replace your homeowners or renters insurance. Make sure you review and understand the terms of your insurance policy and what it covers and doesn’t cover. **Not all insurance will cover damage or loss to property caused by a guest renting your space.” **
Which is as clear as mud.
They used to say that the guarantee is no substitute for a host having their own home insurance that covers STR’s.
Wondered why they changed this
Although Airbnb might not make mention that your domestic home insurance won’t be valid if you decide to use your home for commercial purposes, I would hope this would be something that most hosts would understand just as if you use your car for commercial purposes you need different insurance than if you use it for personal use.
As I mentioned in an earlier post, it would make sense to find home insurance covering STRs before alerting your current provider to stop the risk of this happening.
Of course it is up to each host to decide what level of risk they are comfortable with. Personally and because I have valuables at my property and it is my only major asset, I have taken out specialist insurance (it was only a few hundred more than my standard insurance, so why wouldn’t I). Others are happy to rely on Airbnb’s guarantee and liability insurance.
No standard home owners insurance will cover you for anything related to a business transaction, which is what you are engaged in when you rent a bedroom for money. All policies, which follow the same industry model, have a business exclusion.
We’re not taking here about a broken chair and who pays, this discussion is about liability should your guest get injured while staying at your home or a home you rent out. Who pays for their medical costs and for their loss of income if they are unable to work… for a few weeks or longer.
The average home owner liability claim in 2015, in the US, was for $30,000 and the #1 reason was for a dog bite. The second most often filed claim was for an accident in or around the home.
" I wonder if there is an Air “control the guest experience” value blocking this, or some strategic analysis that indicates providing access to third party insurance products would hasten imposition of requirements for hosts to be insured, leading to fewer hosts due to those costs, leading to lower revenue…"
You can rest assured the smart young folks at Air have stacked the deck against their hosts. As you suggest, this is how platform business models seem to work. Uber being one of the most flagrant examples from what I have read.
I have a standard homeowner policy with Safeco. When we started hosting I asked our broker if Airbnb guests would be covered for liability. She said yes. She also said that our personal umbrella policy would cover them. Every year I ask her to verify via email that Safeco knows that we are still Airbnb hosts and to verify that our liability coverage doesn’t exclude Airbnb guests.
Another risk is opportunity cost. In the past year while you were thinking about doing Airbnb, I made close to 10,000 (after taxes) with my humble little roadside pit stop.
Between airbnb and my in home dog boarding business I’ve made over $100,000 (over 4+ years), hosted over 600 dogs and people, 1000s of nights of stays and had zero accidents.
How many thousands have you lost?
That said, I’m probably overdue for a reversion to the mean. LOL
Saw this on Facebook
Host rents property from landlord
Host has difficult demanding guest
Guest invites others to property
One of the others falls off balcony
Ambulance and police called
Other ends up in hospital
Guest wants insurance details of host
Host does not have insurance
Other now going after landlord
Host thinks Airbnb will cover it
I think landlord will have issues over claim
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