Airbnb and Hosting Your Home
Since its start nearly 10 years ago, the number of people listing their homes for guest stays through Airbnb has skyrocketed. As more and more vacation goers and business travelers look for alternatives to hotel and motel stays, more and more homeowners see hosting their homes as an opportunity to make a little extra income.
Airbnb is an online service that allows homeowners to list and rent lodging in their homes for vacation bookings and short term stays. Airbnb, developed in San Francisco, now has more than 1.5 million listings in 34,000 cities around the world. According to its website, there are more than 300 homes in the Edmonds area alone offering private rooms, floors and entire homes available through Airbnb.
If you’ve been thinking about this kind of service for your own home, it’s important to understand the role insurance plays, especially when a home is no longer just a home but also generates some income.
Learning by Example
Not long ago, we received a call from a client needing to file a homeowner’s claim. The homeowner had some personal belongings stolen. After asking all the right questions and doing the research needed to file the claim, it was determined their personal property was stolen during a guest stay booked through Airbnb. Unfortunately, this client didn’t communicate plans to list their home in this way with their agent. Their claim was ultimately denied by the insurance carrier because their homeowner’s policy did not provide coverage for stolen property under such circumstances.
We don’t like to see these things happen. Understanding these limitations will help future home hosts from experiencing something similar.
Coverage Confusion
It seems pretty straight forward – you have a homeowner’s policy that should cover your home and its contents. Where things get tricky is the moment you start “renting” or in this case “booking” a room, floor, or space inside your home, on a short term basis.
Every homeowner policy is different and every insurance carrier provides different coverages. When you purchase a standard homeowner’s policy, the contract is written with the understanding that a single family home is occupied as such. These kinds of policies often include exclusions for business among other things.
If you purchase a home to use as a vacation property, a second home, or a rental property, there are different policies to cover each use – a standard homeowner’s policy isn’t one of them. In the insurance industry, how you plan to use a home makes a difference.
Airbnb Coverage
Airbnb offers what it calls a “Host Guarantee,” but it makes it very clear this “Guarantee” does not replace homeowners or renters insurance. Personal property such as cash, jewelry, collectibles and artwork, if stolen during a guest stay, are not covered under Airbnb’s program. According to its website, the Host Guarantee also does not protect a homeowner from personal liability claims or coverage for shared and common areas of a home.
Options for Home Hosts
As is the case with different hobbies, business endeavors and enterprises, there are options when it comes to insurance coverage. The same holds true for policies that would include coverage for hosting your home through a service such as Airbnb. There are good options available for vacation homes or Airbnb stays. Costs associated with these kinds of specialty policies are higher but so are the risks. As Airbnb and other services continue to grow and our sharing economy continues to evolve, I expect more options will become available. The best advice I can give is to always talk with your agent first so that you know your home and your family are properly protected. The peace of mind that brings is priceless.
Trevor S. Campbell, CIC, is the President of Insurance Services Group, an Edmonds based independent insurance agency serving auto, home, and business insurance clients throughout Washington and seven other western states. He chairs the Washington Education Committee for the National Alliance for Insurance Education and Research. He is a past President for the Professional Insurance Agents Association of Washington and Alaska and was the 2013 Agent of the Year.
