Are you thinking about renting your place as an Airbnb? Or are you already an Airbnb host and wondering if your current insurance policy offers adequate coverage?
Home sharing is a fun topic. But taking out the right insurance policy can be confusing. Is it best to choose homeowners insurance, renters insurance, or something else to protect yourself and your property when others are staying in your space?
Let’s dive right in and find out exactly what type of insurance you’ll need before your guests start showing up.
Will homeowners insurance cover my Airbnb property?
Home sharing is becoming an increasingly popular way for homeowners to make extra money and travelers to stay in beautiful, unique spots around the world. Because of this, more insurance companies are beginning to offer coverage for short-term rentals.
A standard homeowners insurance policy offers dwelling, personal property, and liability coverage for you and your family. (Read our previous post, “How Much Homeowners Insurance Coverage Do I Need” to learn more about each of these types of coverages.) It generally covers damages caused by natural events or fire. It also helps protect you if someone is injured on your property.
Most standard homeowners insurance policies exclude coverage for short-term rentals. If you’re conducting business activity from your home (yes, running an Airbnb is a business!), you will likely need more coverage than your homeowners policy provides.
Let’s say someone trips and breaks their ankle on your property during their vacation and you’re held liable for their medical expenses. Regular home sharing generally isn’t covered by standard homeowners insurance policies. If you try to file a claim to cover the costs, your insurance could be nullified. You’ll have to pay the medical bills out of pocket.
To avoid a situation like this and ensure you’re safely covered, you’ll need to purchase a business/commercial policy or add a special endorsement to your policy. You may also need to take out a landlord policy if you’re expecting to rent out your home for an extended period. Ask your insurance carrier what options they have for renting your home through Airbnb or another home-sharing site.
Can I rent my rental property?
If you’re currently renting your home yourself, are you allowed to rent it out to others as an Airbnb? That depends. First, ask your landlord if subletting is allowed. Also check your contract. Many contracts prohibit home-sharing activity, but not all of them.
If you manage to get your landlord’s permission, you also need to check with your renters insurance company to see if your insurer permits home sharing or subletting. Certain restrictions may apply, such as how long you can rent your property or how much money you can make from renting it throughout the year.
Can I get insurance through Airbnb?
Airbnb’s insurance program protects you (as a host and/or landlord) if a third-party damage claim related to the Airbnb stay is brought against you. Airbnb’s “Host Protection Insurance” includes up to $1 million in liability insurance per occurrence. While this is certainly helpful, it doesn’t replace your homeowners insurance policy or other recommended policies for running a business in your home.
Host Protection Insurance Coverage
Airbnb insurance may cover bodily injury to your guests, damage to property belonging to guests, and damage to shared areas like lobbies or neighboring properties caused by guests.
It’s equally important to understand what isn’t covered by Airbnb so you can fill any gaps with additional insurance. Exclusions include damage or injury resulting from an intentional act, damage to your home or belongings, loss of income, and mold.
It’s important to fill any coverage gaps you have before putting your home up for rent on Airbnb. If you have questions about which type of insurance coverage is best for your particular situation, contact Coverage Direct. We’d be happy to walk you through different options to help you find the best solution. Contact us at any time for a quote or more information.