Hosts may need additional coverage for true peace of mind
Airbnb launched its Host Guarantee program in 2011, offering “property damage protection of up to $1 million USD for every host and every listing.” Since then, stories have surfaced of hosts filing claims after guests damaged or stole their property, only to have those claims apparently denied by Airbnb.
Hosts who have had to resort to this process say it can be confusing, burdensome and frustrating — and may still leave them on the hook for repairs and replacements.
It’s crucial for hosts to understand the full terms and conditions of the guarantee as well as their homeowners or renters insurance policy.
Serious incidents appear to be rare. According to Airbnb spokesperson Ben Breit, of the 49 million stays at Airbnb listings worldwide in 2017, only 0.004% resulted in property damage where the company reimbursed hosts for more than $1,000 under the Host Guarantee. Still, that number may exclude hosts who ultimately weren’t reimbursed or had less than $1,000 in damages.
That’s why it’s crucial for hosts to understand the full terms and conditions of the guarantee as well as their homeowners or renters insurance policy. If something isn’t protected, they can get additional coverage before any incidents happen.
Often, hosts end up frustrated simply because they don’t feel Airbnb is clear enough about its insurance policies or the legality of rentals in a particular location. One host, who wished to remain anonymous because he was uncertain about his own legal situation, said he “110% would have preferred Airbnb to be more transparent up front about the legality of my listing” before he posted it.
When asked about misconceptions around the Host Guarantee, Airbnb pointed to its safety recommendations.
We’ve highlighted some of the key terms and conditions to fill in the gaps. While we don’t address everything in the terms, and hosts should consult an attorney for legal advice on their specific situation, below are some common issues that have caused claims to get denied.
What is the Airbnb Host Guarantee?
Airbnb describes the guarantee as “property damage protection of up to $1 million USD for every host and every listing — at no additional cost.” In other words, Airbnb promises to compensate hosts up to that amount if and when a guest damages their personal property — so long as the terms and conditions are met.
The Host Guarantee is not an insurance policy, and Airbnb specifically says it “should not be considered as a replacement for homeowners or renters insurance.”
With most insurance policies, all policyholders pay a monthly or annual premium, and the insurance company draws from those collective funds to pay out claims if and when they arise. Since hosts aren’t paying for coverage, this functions more like a warranty, with Airbnb agreeing to protect hosts against financial loss from certain types of property damage.
In the terms, Airbnb “strongly encourages you to purchase insurance that will cover you and your property… in the event your loss is not within the terms of the Airbnb Host Guarantee.”
However, most homeowners and renters insurance policies do not cover “business activity,” under which short- and long-term rentals would likely fall. Depending on the personal property that hosts keep in their listings, they may want to consider insurance providers that specifically cover rentals, like Proper or Slice (here is more info on rental home insurance).
What’s covered in the Host Guarantee?
In order to receive compensation from Airbnb, hosts must first be able to answer “yes” to each of the following questions (there may be others depending on the particular situation). Further, they must prove to Airbnb that all these conditions are true:
- Was the residence where the damage/loss occurred “owned or legally controlled by you” during the guest’s stay there?
- Did you list the residence on Airbnb — and did the guest book it — in compliance with Airbnb’s terms?
- Did you make “reasonable efforts” to comply with Airbnb’s safety standards?
- If your listing is an RV or another vehicle, was it stationary and only used for lodging?
- Was there direct physical damage or physical loss involved?
- Did you own the damaged property or was it in your legal custody at the time of the incident?
- Was the damaged/lost property located in or within 1,000 feet of the listed residence?
- Was the damage/loss caused during the stay, as booked on Airbnb?
- Was the damage/loss caused by the guest who booked the listing or someone they invited?*
*The last condition isn’t as common with standard homeowners and renters insurance policies, which normally don’t require the policyholder to identify a responsible party. In practice, providing definitive evidence that the guest actually caused the damage may be challenging.
What’s not covered?
The terms specify many exceptions where property is not covered, including (but not limited to):
- “Fine arts” that can’t be replaced with something similar or require a “repairing, restoration or retouching process.”
- “Electronic data” — electronic devices are covered, but the value of your lost data isn’t.
- Cash and other forms of money.
- Animals (including livestock and pets).
- Watercraft and vehicles that aren’t the actual residence.
- Damage/loss caused by any of the following:
- Natural and weather-related events
- Excessive use of utilities
- Indirect or remote causes
- “Mysterious disappearance” (that is, where you can’t demonstrate how something was lost or damaged)
- “Identity theft or identity fraud”
- Contraband (for example, marijuana in states where it’s illegal)
- Power/utility outages that occur “due to external factors”
- Ordinary wear and tear, faulty construction, mold and mildew, rodents etc.
While this list isn’t exhaustive, it shows that some of hosts’ most valuable possessions — such as cash, pets, data and unique or rare art — aren’t covered. To protect such possessions, hosts can make efforts to securely store them — or seek insurance policies intended to cover such property — before allowing guests to stay in their homes.
What’s the process for filing a claim?
If the damages/losses meet all the coverage criteria, the next trick is navigating the claims process via the Resolution Center. Even if a host is entitled to coverage at this point, missing a single step in this process can give Airbnb grounds to deny their claim. After an incident occurs, hosts must:
- Notify Airbnb (via the Resolution Center or by directly contacting customer service) within 14 days of the incident OR before the next booking begins, whichever comes first.
- Attempt to resolve the issue with the guest directly before involving Airbnb.
- Provide Airbnb proof of ownership of the damaged/lost items “in the form of receipts, photographs, videos, documents or other customary forms of proof.”
- Within 30 days:
- File an Airbnb Host Guarantee Payment Request Form.
- Provide Airbnb with proof that each item was damaged/lost, which must include:
- The “time, cause and origin” of loss for each item, with documentation.
- Proof of ownership of each damaged/lost item.
- The “Actual Cash Value and replacement value” of each item, as well as the amount of damage/loss sustained.
- Any other insurance covering the item.
- The “identity of and other information known” about the guest or others present during the booking.
- The date the host contacted the guest requesting payment for the loss and the date the guest declined or failed to pay.
- Provide Airbnb with any additional “reasonable” documentation it requests in order to determine the value of the loss.
- Respond “timely” to those requests.
- File a police report listing the items, If the damage/loss is the result of a criminal act (e.g. theft).
Airbnb is a technology platform, not an insurer or property management company. Its priorities revolve around growing the platform, not paying out claims.
The terms and conditions include many more stipulations and fine print, but the main takeaway is the Host Guarantee is not intended to cover all situations. In other words, the responsibility falls on hosts to be proactive about protecting their personal property.
This may include discussing with their homeowners or renters insurance provider about whether vacation rental activity is covered, reading the full terms of Airbnb’s Host Guarantee and Host Protection Insurance (which covers hosts against lawsuits from third parties), and taking precautions to ensure any valuable personal property is locked away, stored safety, documented and/or insured with the appropriate policy.
Ultimately, Airbnb is a technology platform, not an insurer or property management company, so its priorities — which the company explicitly states in the terms — revolve around growing the platform, not paying out claims.
Given the limitations involved with the Host Guarantee, hosts may want to consider additional insurance solutions for true peace of mind.
- Sharing My Home | Airbnb Insurance Guide
- The Balance | How to Get Affordable Airbnb or Home-Sharing Host Insurance
- Supermoney | Home Insurance That Covers Airbnb: In-Depth Guide
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- Airbnb Host Guarantee Image adapted from Poster vector created by macrovector – www.freepik.com