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The use of Airbnb and other similar services has grown exponentially over the past few years, with “sharing economy” concepts accounting for about $26 billion in purchasing every year. That market continues to expand every day.
Sharing a home with strangers may sound like an odd concept, yet it’s increasing in popularity more and more each day. However, if your customers choose to participate in Airbnb-style housing with their own home, you should ensure they are properly insured to do so. With the horror stories of rowdy house-sharing guests, enormous parties and just plain property destruction popping up in the news, homeowners can’t be too careful with insurance when it comes to home sharing.
Insurance agents can help their clients navigate home sharing and advise them on the habitational insurance coverages and exclusions that may apply to them. Below are some of the most important things your clients need to know about renting on Airbnb and other similar services.
The minute someone chooses to list their home on a site like Airbnb, the use of the home is changed from “residential only” to a rental-type property.
Normal home policies are not written to support home sharing activities, and the policy will most likely need to be rewritten with another company. For example: liability and personal accident risks would be covered if the person was a guest of the home, but as a paying visitor, the homeowner policy no longer covers that liability, leaving your client at risk.
Insurance carriers are catching up to the needs of modern homeowners, and many of them provide additional coverage options tailored to those policyholders who are Airbnb hosts. While there is coverage available, most of the Homeowners companies are not to the point yet of covering the Airbnb exposure. Specialty companies are taking on this new exposure. As this becomes even more popular changes will come with our standard companies.
Airbnb offers limited coverage in their Host Protection Insurance and also has a Host Guarantee in place to help with some intentional damage to property.
Airbnb offers Host Protection Insurance that is designed to help with certain liability claims. Coverage may be limited and your clients will want to check with their homeowners’ insurance policy to see how Airbnb’s coverage will interact with their own policy. Additionally, Airbnb can reimburse hosts for repairs or replacements to certain property that was damaged or destroyed as a result of guests (or invitees of guests) during an Airbnb stay.
The Host Guarantee and Host Protection insurance don’t cover everything.
Watercraft, vehicles, animals (livestock or pets), fine arts and landscaping are all listed as excluded property on the Host Guarantee. Your clients should thoroughly read the fine print to see what is covered and what is not.
Protecting someone’s home when they’re sharing it with strangers can be complicated, so make sure that your client understands their coverage options so that they can be prepared for whatever those guests may bring with them, or leave behind.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products, or to become an agent, contact us today at (855)-248-1480.