For many homeowners, the idea of using Airbnb just makes sense. While they are away from their residences, they can rent their homes out to visitors and make extra cash. Airbnb has blossomed into a well-respected platform for these types of living exchanges, but there are hidden considerations to diving into this type of arrangement. Namely, what type of exposure are homeowners risking by becoming Airbnb hosts, and does homeowners’ insurance work for Airbnb?
Considerations for Airbnb Host Protection Insurance
As you might guess, insurance carriers have already thought about the concerns and liabilities that come with home sharing. That’s why most homeowners’ insurance policies have exceptions for anything that happens on the property related to a business activity. And, of course, an Airbnb exchange falls under that category. Therefore, if your guests damage your property or they experience personal losses while they are staying at your house, you’ll be left paying for that.
Feel a little like changing your goal to be a part of Airbnb? Before you take that step, know that many insurers offer policy extensions so hosts can reduce their risks while still getting all the advantages that come with Airbnb relationships. These extensions for home sharing insurance aren’t as expensive as the business insurance policies hotels and motels are required to take out. Yes, they’ll mean additional costs each year, but they ensure you aren’t left floundering if a problem occurs and you need to make a claim.
Safeguards to Take When Becoming an Airbnb Host
What are the safeguards can you take when becoming an Airbnb host to lower the chances of a problem on your property? Here are some you can consider to minimize your risk:
- Ask your independent insurance agent about your Airbnb activities. It’s better to get your Airbnb homeowners’ insurance questions answered upfront rather than waiting until it’s too late to do anything. Read through your current homeowners’ insurance policy thoroughly as a starting point.
- Check to see if you can actually be an Airbnb host. Some communities and homeowners’ associations do not allow this type of business activity to occur in the neighborhood.
- Consider creating a corporation under your name that focuses on your short-term rental activities. Then, get the correct policy for coverage. Use the corporation for all your Airbnb transactions.
- Look into getting Airbnb homeowners’ insurance protection. The organization does offer this through its site. However, always ask your agent to verify that the coverage is worth the rate. You may be able to find better, lower-priced coverage elsewhere.
Will it take extra time for you to fully protect yourself and your Airbnb visitors? Absolutely. But it’s worth it for everyone’s peace of mind.