After a series of incidents in which guests trashed host’s homes, and worse, Airbnb began offering a $1 million “host guarantee” in 2012. Three years later, the company rolled out a “Host Protection Insurance” program, offering reimbursement of up to $1 million if a guest sued for injuries suffered during their stay.
But do these kinds of programs really pay off if guests damage your home or sue you for injuries suffered during their stay? Do host guarantees and host protection insurance actually protect you?
I discussed this issue with a friend, a private judge who has handled several lawsuits involving short-term rentals. Being careful not to discuss specific cases, she filled me in on some important things short-term rental hosts like me should know about host guarantees and host protection insurance programs.
Let’s start with liability.
Imagine that the lovely man who has been staying in your home slips on the stairs one evening and ends up in the hospital with a concussion and multiple fractures. He recovers, thankfully, and you breathe a sigh of relief when he sends a note saying he’s okay.
But a few days later, you’re shocked to find that this “lovely man” is suing you for medical costs, loss of work, and “pain and suffering.” He claims that you’re at fault for his injuries because “there was no non-slip covering on the stairs, the stair light was out, and the handrail was broken.”
Will Airbnb pay?
The first thing to know is that there is a big difference between Airbnb’s “Host Guarantee” and its “Host Protection Insurance” programs. “A ‘host guarantee’ is not liability insurance,” my friend told me. “It’s not even insurance.” Airbnb says this plainly: “The Host Guarantee Program isn’t insurance and doesn’t replace your homeowners or renters insurance.”
But what about Airbnb’s Host Protection Insurance? Won’t that help? You read the small print on the Airbnb web site: “Our Host Protection Insurance provides primary coverage for Airbnb hosts and landlords (when landlords are named in a lawsuit)….The program protects against liability claims brought by third parties—up to $1 million USD—that arise from a listing during a stay.”
That’s a relief, you think, turning to the instructions for filing a claim.
Not so fast.
In that situation, my friend says, “You might not be able to count on the Airbnb Host Protection Insurance. To fully protect yourself against liability claims, you need your own liability policy.” For one thing, Airbnb’s Host Insurance Program has too many exclusions. Insurance agent Ross Martin, writing in The Zebra, says that “Airbnb Host Protection Insurance does not cover loss of income, intentional acts, or mold. It is not intended as a replacement for homeowners insurance, and should instead be treated as supplementary protection to your primary coverage. Also …the claims process can be tedious.”
What about property damage and theft?
In 2019, a Sonoma home burned to the ground while it was rented to guests through Airbnb. No one was hurt, but the home was completely destroyed. At least, the homeowners thought, we’re covered by Airbnb’s host guarantee.
Airbnb claims that its “…Host Guarantee provides protection for up to $1,000,000 to a host for damages to covered property in the rare event of guest damages above the security deposit or if no security deposit is in place.”
That statement appears to say pretty clearly that Airbnb will reimburse the host for damage. That means Airbnb would cover the costs of rebuilding the home, right?
Not necessarily. The Somoma homeowners immediately filed a claim for the difference between the amount their homeowner’s insurance would pay and the amount it would actually take to rebuild the home. It then took more than a year and a half and the intercession of NBC Bay Area even to get a response from Airbnb. According to Consumer attorney Robert Tauber, quoted in the NBC story, “promises like the Airbnb Host Guarantee aren’t always easy to redeem….Frequently, their acts are inconsistent with their words.”
What other hosts have to say.
Attorney Tauber’s statement is echoed in many other discussions of the Host Guarantee. Proper Insurance explains that “the terms and exclusions of what is covered with this plan for hosts make it difficult to receive reimbursement beyond minor issues. And if you search around for Airbnb insurance problems, you’ll find countless stories of homeowners who weren’t covered for their claims.”
A search of host forums makes it clear that the experience of the Sonoma homeowners was far from unique. These comments are typical:
The types of requests [for documentation] I got could be a chapter in a book. I got them every last ridiculous piece of paper! Since they had no reason to deny the claim, they just denied it for no reason. Just like that.
I have been trying unsuccessfully to put a claim in to Airbnb. These is no host guarantee center or person to contact! Concerningly it seems that Airbnb are putting in place a lot of obstacles to avoid a claim.
Airbnb case managers are not properly trained, do not have sufficient review, do not gather evidence in any sort of scientific fashion, do not treat cases seriously, make superficial judgments on the fly….
How can you be sure you have the protection you need?
“To make sure you’re protected,” my friend told me, “you need your own insurance. Then you won’t be left to rely only on host guarantees or insurance provided by a short-term rental platform.”
If your homeowner’s policy covers short-term rentals, check to see whether the liability limits are high enough, just in case. If that policy excludes short-term rentals, as many do, you might need to change insurance companies.
“Document everything,” she continued. “The host has the burden of proof, so you must be able to show that the damage was caused by the guest. Take photos that show the condition of the home before the guests arrive and immediately after they leave. Get reasonable estimates for repairs: overestimating what it will take to repair the damage can result in a denial of your claim. Keep all the invoices and other paperwork.”
But documentation can get complicated. If you have guests coming in one right after another, you need a way to prove which guests caused the damage. That means checking the home as soon as the first guests leave and before the others arrive. If you can’t do that yourself, you’ll need to find someone to do the inspection for you – a cleaner, a trusted friend, or a property manager.
Don’t expect a quick settlement.
“Assume that the company will try to deny your claim,” my friend said. “For example, they might say there’s no proof that the guests caused the damage or the damage was excluded.”
Getting a positive result will take time and effort on your part. Even after you’ve dotted all the i’s and crossed all the t’s, you can’t be sure you’ll succeed. For reliable protection, you need a good homeowner’s insurance policy that doesn’t exclude short-term rentals. Then you won’t have only your listing platform’s assurances that they have you covered.
Have you ever had to file a claim with Airbnb or another listing platform? Did the platform’s “host guarantee” or “host insurance” pay off? Please tell us about your experience in the Comments or on our Facebook page.