Menu
Protecting your short term rental property with the right insurance is a must—but many policies fall short. Here are our recommendations for insurance providers that make the grade.
Airbnb and short-term vacation rental hosting is a relatively new business model compared to established industries like hotels or managing rentals as a landlord; therefore there aren’t many insurance companies that offer comprehensive policies for Airbnb and short-term rental property owners. As an Airbnb host, it’s imperative that you have an insurance policy that safeguards every aspect of your business: from your home and property to your rental income, as well as yourself, your family, and your guests.
In this article, we’ll explore what kind of insurance coverage Airbnb offers to their hosts, what you need to be looking for in an insurance plan, and how Proper Insurance offers the best insurance for Airbnb hosts.
You most likely already have a homeowners insurance policy on your property. But as you plan to turn your home into an Airbnb or vacation rental space, things get a bit complicated.
There’s a lot of contention about what an Airbnb property is in the eyes of insurance agencies. When you rent out your place as an Airbnb, it turns your property into a business pursuit which—when you read the fine print—immediately voids your homeowners insurance, potentially leaving you without protection even for a claim that has nothing to do with Airbnb guests.
Some believe that a landlord insurance policy is the way to go; but Airbnb guests aren’t considered “tenants,” since their stays are short-term.
And as the final blow, commercial insurance policies aren’t fit for short-term vacation rental spaces either because it still severely lacks the loss of income and liability coverage you need.
So what’s a rental property owner to do?
You need a specialized, comprehensive, and tailor-fit insurance policy that covers the property with aspects of homeowners, landlord, and commercial insurance policies so you have a safety net for anything that will happen to you, your guests, or your Airbnb space.
AirCover for Hosts Has LimitationsAirbnb offers an insurance program for hosts called AirCover. It’s automatically included when you register to be an Airbnb host.
AirCover for Hosts includes Host damage protection, Experiences liability insurance, and Host liability insurance, which provides hosts with up to $1 million in coverage of any untoward events during the duration of the guests’ stay. This might include damage to your property or belongings by guests, a guest’s injury, or loss or damage to guests’ property.
However, AirCover for Hosts has a lot of limitations. Airbnb won’t be able to protect you and your property when it gets damaged due to natural calamities like floods and earthquakes or loss of income due to circumstances beyond your control such as renovation, property damage and repair and the like. Airbnb even recommends you get additional coverage since AirCover for Hosts isn’t a substitute for a homeowner’s property or liability insurance coverage.
What to Look for In an Airbnb or Vacation Rental Insurance Plan
There are certain aspects of an insurance plan you’ll want to make sure are present in the policy you’re planning to purchase for your Aibnb. Here are some features to keep in mind:
Look for an insurance plan that covers loss of income due to circumstances that would prevent you from renting out your Airbnb. These may include renovation, construction noise from another property nearby, even damage from a natural disaster or fire. While most landlord policies only cover ‘loss of rent’ based on the average rental income of your area, the loss of income clause will extend to the higher income from short-term rentals.
Another consideration is protection of all the contents that come with your Airbnb space. This includes furnishings, furniture, beddings, and the like. Find a policy that covers replacement and repair of in-property belongings.
Say the guest that checked in to your Airbnb slipped on soap scum in the bathroom, or fell down a flight of stairs. You could be held liable for an injury a guest incurs during their stay, so you need to have thorough liability coverage
Your property might be located in a place that’s prone to natural disasters like flooding, earthquakes, and other natural catastrophes. Your insurance plan should cover the damage to the property and the loss of income during the time needed to make repairs.
In the event of a theft, most standard homeowners, landlord, and commercial insurance policies require you to prove that your property was forcibly entered. Look for a tailored insurance policy that has a clause that won’t require you to prove that your property was broken into.
As an Airbnb property owner and host, you’ll want to cover all the bases for your property, whether you’re living in it as an owner, renting it out for guests, or some combination of the two.
Whatever company and insurance plan you choose, make sure you thoroughly read the fine print so you can put your mind at ease that whatever happens, your insurance provider has got your back.
