An Owner’s Guide to Airbnb’s Host Guarantee Part II

Whether your vacation rental property is a sprawling mountain cabin, a relaxing beachfront cottage or a modern condo in the midst of a bustling metropolis, you face risks every time you rent it to others. Those risks range from all kinds of situations like if a vacationer damages your property to being held legally and financially liable if someone is injured on your property. And while you might think these risks disappear under the coverages offered by sites like Airbnb and Vrbo, you’re actually not as protected as you’re led to believe.

In this blog, An Owners Guide to Airbnb’s Host Guarantee Part II, we’re going to give you real-life examples of how your vacation rental business could be left vulnerable if you rely on these incomplete types of coverage.

Need a refresh of the basics of Airbnb’s Host Guarantee? Click here

Platform-Limited Coverage

Host liability coverage is only available when your property is rented through a listing site’s platform. If you rent to vacationers outside of an online booking platform such as Airbnb or Vrbo and you are the subject of a personal injury claim arising from an off-platform rental, the site’s insurer may deny coverage and responsibility. Free host liability policies only take effect when a rental contract begins and ends when the rental period is over, leaving you vulnerable to risks between bookings.

Real-life Example

• You own a short-term rental property that you list on Airbnb. It’s the offseason, so the property is unoccupied when a tree from your yard falls and damages your neighbor’s roof. The neighbor, or their insurance company, sues you for the cost of repairs after an inspection determines you were negligent in maintaining the tree. Because your property was unoccupied, the free Airbnb insurance would not protect you from the lawsuit.

Host Liability Policy Exclusions

Host liability policies generally limit coverage to liability only and exclude coverage for property damage. Because of that, vacation rental property owners also sometimes mistakenly assume that host liability policies cover any type of personal injury claim or legal lawsuit filed against them as a result of rental activities. The reality is that free host liability policies often come with many limitations, conditions, and exclusions.

Real-life Example:

• A photo of your vacation rental property that includes a guest on your property’s website. The guest then sues you for $8,000, claiming that the photo usage is a copyright infringement. This type of advertising injury claim could be excluded under the Airbnb insurance, leaving your assets at risk.

You could be protected from advertising injury claims, like this, if you have vacation rental insurance. Always read the terms and conditions of a platform’s host liability policy and pay extra attention to its exclusions. If you Don’t understand what’s covered, you could be in for an unpleasant surprise if the insurer denies coverage and you find yourself on the hook. Looking for guidance or help to understand the differences in policy types and coverages? Get a free consultation with a vacation rental insurance expert here.

You May Still Need to File Claims with Your Primary Insurer

Some free host liability policies or host guarantee policies may not be considered primary coverage. This means that if you have another insurance policy that provides liability protection for vacation rental activity, both the host liability policy and your other insurance coverage could share responsibility for covered claims. So, the host liability policy doesn’t eliminate your need to file a claim with your existing insurer.

Airbnb’s Host Guarantee Isn’t Vacation Rental Insurance

The bottom line is, claims happen but not all claims may be covered like you’re led to believe. Your vacation rental property is important to you, so don’t rely on a free policy with lots of limitations for protection. Make sure you have insurance that meets your unique needs as a short-term rental property owner. Vacation rental insurance is a comprehensive policy that protects you from property damage, liability claims lost income and more. Find out more about how CBIZ Vacation Rental Insurance can protect you from the risks you face when renting your property. Request a free quote today!