Airbnb is a popular short-term rental platform that allows property owners to make an additional stream of income. Instead of letting your second property or vacation home go to waste, you can rent it short-term on Airbnb to generate income. However, before renting on Airbnb you must consider insurance. Your existing policy may not be enough to cover short-term rentals. Don’t take the risk, learn all about short-term rental insurance and the best Airbnb insurance.
The Risks of Listing on Airbnb
While listing short-term rentals on Airbnb is an excellent way to make rental income, it is not risk-free. By renting out your property, you expose yourself to risks that your homeowner’s policy likely won’t cover. For example, if Airbnb guests cause property damage, you may be left to deal with the expense of it unless you have proper Airbnb insurance.
Does My Homeowners Insurance Cover my Airbnb?
When you use your property as an Airbnb, you risk potential insurance gaps. Before renting on airbnb you must consider insurance. Most homeowners insurance will not cover short-term rentals, even if you have a landlord policy. Do not assume your property is covered if you have homeowner’s insurance, as those policies are designed to protect you from everyday risks, not short-term rentals. Homeowners’ insurance will usually cover damage to your home from natural disasters and also a personal liability if someone is injured on your property.
Some policies may allow you to extend your coverage for a one-time short-term rental, and others will require you to purchase an endorsement for a temporary period. However, if you plan to rent on Airbnb, homeowners insurance won’t be enough.
If you consistently rent a property on Airbnb, you will most likely need an insurance policy for short term rentals. Renting out a property regularly is considered commercial use, and you will need an Airbnb insurance policy that covers this usage.
Airbnb Host Guarantee
Fortunately, Airbnb offers Host Protection Insurance for primary liability coverage at no additional cost. The policy is for up to $1 million, and it covers guest or third-party injuries on your property. For example, if a guest breaks an arm when tripping in the living room of your property, this policy will cover their bodily injury.
However, this policy is not your policy as a host, it is meant to protect you under Airbnb. While the policy is beneficial, it does not cover damages. The Airbnb Host Protection Insurance will not cover:
- Vehicle accidents
- Damage from guests
- Bed bugs
Airbnb also offers a Host Guarantee for up to $1 million in host damages, if the guest damages above the security deposit. However, it is not primary insurance. It will only pick up deductibles or items not covered by your primary policy. Additionally, the Host Guarantee will not cover theft, normal wear and tear, or pets.
While the free Airbnb policies can be helpful, they are not substitutes for primary short-term rental insurance. They come with a long list of conditions and criteria, often insisting that you try to resolve the issue with the customer yourself first. The Host Guarantee is also not primary insurance, which is why you will need an Airbnb insurance policy.
Do I Need to Disclose Airbnb Usage?
When shopping for an Airbnb insurance policy, honesty is the best policy. It’s imperative to be transparent and up-front about your intentions with your property. Some short-term rental policies may suffice, but make sure you are upfront with your agent. Let them know upfront that you plan to list the property on Airbnb. This will ensure that you get the correct policy with sufficient coverage. If you do have to file a claim, you are more likely to get denied if you were not honest about Airbnb usage. It’s in your best interest to explain the intended usage for the property and to get a short-term rental policy that sufficiently covers Airbnbs.
The Best Insurance for Short Term Rental
Before renting on airbnb you must consider insurance. You need Airbnb insurance that covers short-term rentals to protect your property and prevent a gap in coverage. Most home insurance policies will not cover short-term rentals, so make sure to let your agent know that you will use the property as an Airbnb when shopping for insurance.
Before starting your short-term rentals, make sure to get the best Airbnb insurance. For the best insurance for short term rentals, look no further than Portal Insurance. Portal Insurance is Alabama’s full-service independent insurance agency here to help you find the right insurance for your needs. We offer Rental Property Insurance that can cover your Airbnb or short term rental. Work with our experienced team to find the best policy for you so you can rent worry-free on Airbnb. Learn more about our short-term rental insurance and get your free quote today by contacting Portal Insurance at 251-264-3232 or via our website.