Airbnb Host Damage Protection: A Definitive Guide

Airbnb host damage protection should be on the list for any short-term rental property owner. When you accept a booking on Airbnb, you are essentially entrusting your property to a guest who is a complete stranger. What happens if that guest and/or their group seriously damages your property?

There are numerous in-depth writings online that mostly focus on Airbnb’s Aircover, which does include a section for Airbnb Host Damage Protection, but today, we are going to address homeowner’s insurance and how an Airbnb host can navigate and ultimately find protection with their name on it.

It’s not smart to rely solely on Airbnb’s free damage protection. After all, it’s the #BookDirect movement most hosts are trying to achieve, which eliminates Airbnb’s high booking fees!

Landlord Insurance DOES NOT Provide Airbnb Host Damage Protection

A big portion of Airbnb hosts in the U.S. purchase what’s called a dwelling (DP) or landlord insurance policy on their short-term rental property. It’s understandable as an Airbnb is a rental property; the shortcomings, however, is a landlord policy was never intended to cover the scope of an Airbnb or short-term rental property. The clearest view of this limitation is damage caused by a guest. It’s simply not covered.

Let’s look at it from the perspective of a long-term rental. When you lease a property to a tenant, you require a significant security deposit, and at the end of that lease, if the tenant causes significant damage, you keep their deposit and seek damages in court if necessary; you don’t call your insurance company to file a claim.

Airbnb or short-term rentals are no different. If a guest significantly damages your property, you are on your own unless you have an insurance policy that specifically covers guest-caused damage. The scary reality of Airbnb is that statistics are working against you as you are renting to multiple guests per year versus one tenant with a long-term rental, which was likely heavily screened.

Pro Tip: The Proper Insurance policy does provide Airbnb host damage protection and has no limit on damage caused by a guest.

Homeowner’s Insurance DOES NOT Provide Airbnb Host Damage Protection

Another big portion of Airbnb hosts in the U.S. purchase what’s called a homeowner’s (HO) insurance policy for their short-term rental property. Recently, it’s become very misleading as most homeowner’s insurance providers offer what’s called a home-sharing endorsement, but this endorsement is only applicable to a primary residence, not a rental property.

What happens is insurance agents hear the word “Airbnb” and immediately jump to a homeowner’s policy with a home-sharing endorsement, not realizing they are providing the wrong policy to the Airbnb host. Yes, this endorsement is fine for a primary residence but not an investment or secondary property. A home-sharing endorsement is only adequate if the property is the Airbnb host’s primary place of residence or “residence premises,” the place they get their mail, and the place they reside.

Needless to say, not only does a homeowner’s insurance policy not cover rentals, but it certainly does not provide Airbnb host damage protection, that is unless the property is your primary residence and you have a home-sharing endorsement.

Pro Tip: If your Airbnb is your primary residence, buyer beware, as home-sharing endorsements are very limited in scope and typically only provide around $10,000 in coverage, such as the Allstate HostAdvantage product. If you want comprehensive coverage, you are far better served with a commercial product such as what Proper Insurance offers.

Proper Insurance DOES Provide Airbnb Host Damage Protection

With trademarked endorsements, the Proper Insurance policy is the only insurance product in the U.S. for Airbnb hosts that provides no limit on damage caused by a guest, which in turn, is true comprehensive Airbnb host damage protection.

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