Whether you currently run an Airbnb or you’re planning on opening one as a side hustle, you need to understand which Airbnb insurance is right for you. Several different insurance policies offer varying degrees of coverage, however, it can be difficult to find an insurance policy that fully covers all your needs as an Airbnb host.
In this guide, we’ll take a look at everything you need to consider before taking out insurance as an Airbnb host. We’ll also take a look at some of the existing insurance schemes available for Airbnb hosts and short-term rental property owners.
Why Airbnb insurance is essential
Getting the right insurance for your Airbnb is an essential part of running your property rental business. You want to make sure that your belongings are protected against theft and damage and that you are not held accountable for any injuries or mishaps guests may experience. As you’re running a business, you also need to make sure that your rental income is legally protected in the event of delayed or unpaid rental.
Airbnb hosts have to deal with a lot in their day-to-day business including instances of vandalism, theft, damage to their property, and sometimes even damage to the property of their guests. Getting the right Airbnb insurance for hosts can therefore help cover the costs should any of these incidents take place.
Depending on where your Airbnb is located, there may also be additional insurance required for a specific area given the local laws and environmental factors that may affect or damage your property. Getting the right insurance is therefore an important part of making sure you do not pay for any unexpected costs out of your own pocket or by dipping into your business’s profits. Ultimately, getting Airbnb insurance as a host gives you peace of mind so that you can focus on making the most out of your Airbnb property rental.
What you should look for in an Airbnb insurance plan
When you’re on the hunt for the best Airbnb insurance plan to suit your business, there are a few fundamentals that should be included in your policy at the very least. A good Airbnb insurance plan should include the following basic coverage.
Loss of income cover
Keep an eye out for a loss of income clause in your insurance coverage package. Loss of income coverage should include periods over which you are not able to generate income from your property. Circumstances like building maintenance or renovation can prevent you from renting out your property, therefore disabling you from being able to collect rent from your Airbnb. Loss of income cover will make sure you are compensated during this time.
Cover for property and property contents
Airbnb hosts will need to insure the belongings they use to furnish their Airbnb. Although there is some degree of compensation provided by Airbnb through their Aircover program, it does not include all damage caused by guests or theft of personal belongings. Hosts should look for this insurance to make sure the likes of bedding and interior decor are covered by their Airbnb insurance.
Cover against guest injury
If a guest hurts themselves in your property, you may be held liable for any injuries they incur. For this reason, you must get liability coverage as an Airbnb host.
Coverage for the specific Airbnb location
This type of coverage heavily depends on the physical location of your Airbnb property. The geographical location may be prone to natural disasters like earthquakes, flooding, or wildfires. In the event of your Airbnb becoming damaged as a result of one of these occurring, you will need insurance coverage that will cover the repair of any property or the replacement of any goods necessary.
Theft cover not requiring proof of forced entry
One of the risks Aribnb hosts run is having the goods in their property stolen by guests. Some insurance policies will offer protection and coverage for stolen goods if the property owner can prove that the Airbnb was broken into. As an Airbnb host, you should make sure that your damage and theft cover does not require proof of forced entry.
Is AirCover insurance?
Aircover is the latest version of what Airbnb used to call their host guarantee. The revised program now offers compensation for more aspects of Airbnb hosting but still does not provide the same level of coverage as a well-structured insurance policy would.
But what are the key differences between Aircover and Airbnb insurance for hosts? Firstly and arguably most importantly, Aircover will not provide coverage if the property is not occupied by an Airbnb guest during the time of an incident. This means that Airbnb hosts will have to fork out cash for damage to their property caused by natural disasters, loss of income, or any other external factors affecting the availability of their property unless they are covered by their own insurance.
The second key difference between your own Airbnb insurance and Aircover comes when you need to file a claim. One of the disclaimers laid out by Airbnb for hosts in their terms and conditions is that you have to try to reach an agreement with the guest before you try to claim through the Airbnb platform. In other words, you should try to get the guest to pay for any damage before approaching Airbnb.
Insurance works slightly differently in that you can approach them directly after an incident has occurred and file a claim directly.
Different insurance plans and Airbnb
So with all these factors to consider, what is the best option for Airbnb insurance? We’ve listed some of the insurance options available for hosts, each of which will ensure you’re covered when renting out your property on Airbnb. Here are a few existing insurance policies you, as an Airbnb host, can consider.
Airbnb and homeowners insurance
If you’re the owner of the property you’re renting out on Airbnb, you need to make sure the terms of your insurance policy and your living arrangements align. One of the most important things to remember if you are renting out a home on Airbnb is that homeowners insurance will not cover your Airbnb if you do not also live on the property.
This is one of the factors many hosts overlook as they list properties on Airbnb that they do not occupy as their home. If you are residing at the property and want to see if your homeowner's insurance will cover you, make sure your policy has a unit or residence rented to others clause. Hosts looking to insure their Airbnb under this type of insurance should also make sure their policy does not have a clause that prohibits “business activity”. Renting out your property as an Airbnb if you do not live there will exclude your property from homeowner’s insurance coverage.
One of the perks of homeowner’s insurance is that it will cover the personal belongings situated in the rented space against theft or damage. Again, hosts should double-check that the clause does not specify that there has to be proof of forced entry beforehand.
Does landlord insurance cover an Airbnb?
Although landlord’s insurance does not completely cover Airbnb rentals, there are aspects of the insurance you can make claims against if your property is compromised while being rented through Airbnb. However, typical landlord’s insurance does not apply to properties rented out on a short-term basis.
A short-term basis in most instances is defined as a period of fewer than 30 days. However, no policy prohibits you from accepting Airbnb guests for longer stays. Therefore if you would like to host an Airbnb guest for longer than one month, your landlord’s insurance will cover you against natural disasters and loss of income.
It’s important to note that landlord's insurance does not offer coverage for any of the personal belongings you may use to furnish your Airbnb.
Can commercial property insurance cover an Airbnb?
Commercial property insurance is the best insurance policy to buy if you have invested in a property with the sole purpose of running it as a full-time Airbnb. Owners of these kinds of properties typically focus on short-term rentals only.
One of the main benefits of commercial property insurance is that it will provide full coverage of any damage to your Airbnb. The provision of liability insurance will also cover the costs incurred in the event of a guest becoming injured on your property during their stay.
Renter’s insurance and Airbnb
Airbnb arbitrage is quickly becoming one of the top trends in the Airbnb space. If you are investigating starting an Airbnb in a property you are renting, you may want to consider getting renters insurance for the property.
However, before proceeding with listing your property, you should speak to the property owner and double-check the specific rules laid out in your lease agreement for subletting. From here, it will be far easier to determine which insurance policy is right for you and your Airbnb.
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