Updated June 4, 2021
Reading time: 3 minutes
It seemed like a bizarre concept just a decade ago, but today, Airbnb is synonymous with travel. For Airbnb hosts across the country, home-sharing has become a source of extra income. Some hosts, however, may not be aware of how renting out a private room or their entire home may affect their homeowners insurance.
If you’re a newbie to hosting or a longtime Airbnb Superhost, it’s important to familiarize yourself with how your homeowners insurance provides coverage to your short-term rental. Most policies will require endorsements and/or supplemental coverage to protect your property.
This guide to Airbnb hosting and the important homeowners insurance policies that go along with it can help you clinch the Superhost status.
Use Insurify to compare numerous homeowners insurance quotes simultaneously, for free.
Homeowners Insurance exists to protect policyholders and their property. Traditional home insurance protects homeowners from named perils, including theft and damage from natural disasters or extreme weather. When operating a business from your home, which includes renting out to Airbnb guests, policies become more convoluted. That being said, it’s important that you as a host have adequate coverage, including liability, bodily injury, and property damage protections, which are not generally included on standard policies. If you’re renting out your home relying on the simple protections of your standard policy, you could be putting yourself and at risk of liability and financial hardship as you’ll likely be uninsured.
Airbnb offers Host Protection Insurance, which provides hosts protections up to $1 million for liability and property damage. There are, however, major gaps in the coverage provided by Airbnb, and should not be considered complete insurance. Host Protections do not cover loss of income, or repairs to damages in certain situations, such as water damage or mold. This supplementary protection can be paired with a Host’s standard homeowners policy to provide extra protection to their property.
In addition to a standard home insurance policy and company-provided protections, homeowners can add an Airbnb Endorsement to their regular policy. An endorsement will add further protections for hosts, including but not limited to liability and theft. If managing Airbnb rentals is your main source of income, hosts may want to consider a separate Landlord Insurance Policy. This would be the ultimate source of protection for hosts, offering dwelling, structure, property, lost income, and liability claims.
Renting out your extra room or entire property to strangers can be a fantastic way to earn extra income, but naturally, comes with a fair share of risks. Even with the protection from security deposits, hosts can be left with major losses from vandalized, burglarized, or other accidental property damage properties. Plus, if you don’t carry correct liability protections if a guest is injured while on your property, you could be held legally responsible for their medical payments and other associated costs. Similar to the traditional landlord/tenant model, the owner of a property is responsible for covering the cost of major repairs and improvements, which is why proper contracts and house rules should be drafted prior to an Airbnb stay.
When considering the risks posed to Airbnb hosts and their property, it’s understandable that many homeowners insurance companies don’t love when their policyholders rent out rooms on the internet. Similar to the changes the ride-sharing gig economy, spearheaded by Uber and Lyft, had on auto insurance, with the increased popularity of vacation rentals on personal properties, Home-Sharing Policies are getting easier to find and purchase. The following insurers offer coverage options to Airbnb Hosts:
As previously mentioned, deciding to post an Airbnb listing doesn’t come without some risk. However, there are some tips first-time Hosts can follow to reduce their risk of scams, damage, or other financial hardship as a result of guest activities.
Screen potential guests and avoid enabling “ instant book ” if possible. The instant book feature allows Airbnb users to book your property without your approval. Though this allows for a faster booking process for both parties, it waives your right to evaluate potential guests ’ negative reviews by other Airbnb hosts. This way, you can avoid handing over keys to a known troublemaker.
By charging a preliminary cleaning fee to your Airbnb listing, you’re giving yourself a buffer in case you need to hire an outside cleaning service to tidy up any big messes and to prepare for future guests.
It’s obvious why a good review is desired by Airbnb hosts. The higher your star reviews, the higher your response rate will be from users on the Airbnb app. Upon check-in, consider leaving guests travel tips for your area, a few toiletries, and maybe even a bottle of wine. Especially for new hosts, building some clout with great reviews can get more renters in the door.
Though some damages caused by your Airbnb guests may be covered under named perils in your standard homeowners insurance policy, you may want to consider adding supplemental coverage in the form of an endorsement or additional policy. Airbnb also offers hosts protection in the form of liability coverage. Even still, hosts whose main source of income comes from their rental properties should consider a Landlord policy to ensure their source of income is fully protected.
Superhosts earn their titles on Airbnb. By racking up great reviews from a large percentage of their guests, Airbnb hosts can earn this badge after some time on the platform. First, think of the basics, like Wifi access for guests and extra toilet paper an arm's length away. Once you’ve got those things covered, consider what you’d look for in a standard hotel room, and spruce up your space with inexpensive enhancements in decor from Amazon or other web retailers. A great host offers their guests the best Airbnb experience possible from start to finish. Earning the Superhost badge can catch the attention of more potential guests, in turn, increasing your revenue.
If you choose to opt-out of additional coverage options as an Airbnb host, you’ll want to make sure that your standard policy will at least cover you to an extent. If you’re looking for a new, broader homeowners insurance policy, use Insurify, an online insurance quotes comparison tool that lets you compare multiple quotes at once.
Don’t let the potential risks of hosting Airbnb guests damper the excitement of home-sharing. Protect yourself with proper homeowners insurance coverage, and utilize those spare rooms in your home for some extra cash. Use Insurify to get the best possible coverage for your rental.
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.
Jackie's work has been cited in USA Today, The Balance, and The Washington Times.Learn More