ImagePixel/Getty Images: Illustration by Issiah Davis/Bankrate
Key takeaways
- Renting your home on Airbnb may not be covered by your homeowners insurance if it is considered a business activity.
- Airbnb offers a free insurance plan called AirCover, but it may not cover all potential damages or liabilities.
- It is important to consult with a licensed insurance agent before listing your home on Airbnb to ensure you have proper coverage.
- Other home-sharing platforms, such as VRBO and Flipkey, may have different insurance coverage considerations.
Hosts that choose to rent out all or part of their homes on Airbnb are automatically enrolled in the free Airbnb insurance plan called AirCover. AirCover provides damage and liability protection, plus loss of income coverage if you need to cancel a listing due to guest-related damage. However, Airbnb’s AirCover plan may not be enough on its own to fully financially protect your home. Bankrate’s team of insurance experts explains what you need to know about your home and Airbnb insurance policy before you list your property for rent.
Does homeowners insurance cover Airbnbs?
If you rent your property on Airbnb often enough for your home insurance provider to consider it a business, you likely won’t be covered. If you only rent on the occasional weekend, your home insurance policy may help to cover Airbnb losses like if a guest breaks your television set or a storm blows some shingles off your roof while the home is guest-occupied. But, it is ultimately up to your home insurance company to decide whether renting out your home counts as a commercial activity, meaning you treat the home you own more as a business than a place you live. Home insurance is designed to financially protect a homeowner (and their financial lender) from unexpected losses — it is not designed to cover businesses.
Your home insurance policy might, however, extend coverage to Airbnb rentals if you rent the home infrequently, like once every few months. In that case, your carrier may view your home as your residence (not your business venture), and your insurance coverage would apply. But, depending on your home insurance company, you might need additional coverage like a standalone policy or home-sharing endorsement. For instance, Allstate offers a HostAdvantage endorsement on their home policy to cover home-sharing rentals. This protects you against things like theft and damage to items within the home.
With Airbnb, home insurance can get complicated. Before you list your home, set aside some time to speak with a licensed insurance agent. They can walk you through what’s covered — and what’s not — under your home insurance policy and help you identify any coverage gaps.
What does Airbnb’s insurance cover?
Airbnb insurance for hosts, called AirCover, provides liability insurance and financial protection to hosts for some guest-related damage. It also includes liability insurance for hosts that sell “Experiences” through Airbnb. This free coverage is designed to financially protect hosts and others involved in your rental, like co-hosts and cleaners.
AirCover Host damage protection
Host damage protection provides up to $3 million in coverage to financially protect hosts if a guest damages the inside or outside of their property, including the host’s personal belongings, appliances and vehicles. Some things it covers include:
- Damage to your home, property or belongings from a guest.
- Damage to your parked vehicles or boats caused by guests.
- Lost income if other bookings must be canceled due to unexpected guest damages.
- Extra cleaning required due to damage caused by guests.
AirCover Host liability coverage
The other component of AirCover is Host liability insurance. It offers up to $1 million in coverage including:
- Bodily injury liability for guests and other people, like cleaners and Co-Hosts.
- Property damage coverage for guests’, cleaners’ and Co-Hosts’ personal belongings.
- Property damage in common areas, like building lobbies, caused by a guest.
Host liability insurance does not cover intentional damage, injury or situations covered under Host damage protection.
AirCover Experiences liability insurance
AirCover uses a slightly different policy variant for hosts selling experiences at their Airbnb. Experiences liability insurance includes $1 million in coverage to hosts for guests (or others) who are injured or have their belongings damaged during an Airbnb Experience, including online experiences. Coverage also kicks when you are preparing an area for an Experience or cleaning it afterwards.
Similar to Host liability insurance, Experiences liability insurance does not cover intentional damage or injury. It also does not cover damage, loss or theft to the host’s personal property. Experiences that aren’t covered include:
- Aircraft experiences or certain extreme activities
- Defamation, electronic data theft or intellectual property rights (and other online-related risks)
What does AirCover not cover?
AirCover has some notable exclusions:
- Intentional damage or injuries
- Regular wear and tear
- Cleaning and trash removal fees
- Damage related to acts of nature like earthquakes, hurricanes, floods and severe weather
- Mold damage
Most of these things are already common home insurance exclusions, except for severe weather. Remember, if your home insurance company determines that you’re using your home as a business, your claim could be denied even if the damage results from a covered home insurance policy peril.
How to file a claim with AirCover
If you need to file a claim with Airbnb’s AirCover for Hosts, you can start a reimbursement request online for a damage protection claim. You must log into your account, select which reservation you are requesting reimbursement for and follow the steps. For a Host liability insurance claim, you can fill out the liability claim form to submit, which will start the claims process.
Where to find insurance for Airbnbs
Airbnb insurance by itself may not be enough. To help fill in coverage gaps, some major insurers offer special insurance for Airbnb hosts, typically called short-term rental insurance. Depending on where you buy it from, short-term rental insurance may be available as an add-on to your home insurance or as a separate policy. These insurers include:
Landlord insurance may also act as insurance for Airbnb hosts, but this will also depend on where you buy your policy. Some landlord insurance providers will not cover a property that is left vacant for long periods of time, which is something an Airbnb host could run into. Speaking with a licensed insurance agent can ensure that the Airbnb insurance coverage you’re purchasing will cover what you need it to.
Insurance for other rental sites
If you rent your home through a site other than Airbnb, you’ll likely still need to have some type of short-term rental insurance in place to protect your investment. Here are some of the insurance coverage considerations from other popular home-sharing platforms:
- VRBO: VRBO provides $1 million in liability coverage for stays that are processed through the HomeAway checkout platform. The policy does not include coverage for damage that tenants cause to your property.
- FlipKey: While FlipKey doesn’t offer its own insurance policy for hosts, it does suggest that hosts talk with their insurance agents about their needs so that hosts have adequate financial protection.
- Onefinestay: Onefinestay has an insurance policy for hosts, which covers theft and damage. However, the company recommends that hosts check their existing policies for coverage and notes that hosts can purchase their own coverage.
- Booking.com: Booking.com provides homeowners and property managers with $1 million in liability coverage at no additional charge. Unlike Airbnb, homeowners must opt-in for Booking.com coverage.
Frequently asked questions
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Even if you carry a standard homeowners insurance policy and home-sharing coverage, you might still have gaps in your coverage. For instance, if you own a home in California or another earthquake-prone location, you may want to consider purchasing an earthquake insurance policy. The same goes for homes in flood-prone areas. Standard homeowners insurance policies do not cover flood damage, so you might look into a flood insurance policy from your home insurance provider or the National Flood Insurance Program (NFIP). Just be sure to confirm the coverage extends to rental homes.
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Yes, Airbnb insurance coverage (called AirCover) is free from Airbnb. It includes up to $3 million in host damage protection, $1 million in host liability protection and $1 million in liability insurance for those who offer Experiences through Airbnb.
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Airbnb currently offers travel insurance to guests in nine countries. The travel insurance is offered through partner companies and allows guests who choose the insurance to request reimbursement for their non-refunded booking expenses if they have to cancel their trip for a covered reason.
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Yes, if you have a homeowners policy beyond your free AirCover coverage, it is essential to notify your home insurance carrier of how you utilize that property. Carriers offer different policy types depending on how a property is used, whether for living, renting, vacationing or even as an Airbnb. If you have the wrong policy type, you run the risk of having your claims denied. Depending on your carrier and how you use the property, you may have various policy options to accommodate your property. If you use this property exclusively as an Airbnb, your carrier may only offer business insurance.
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