The Burning Host Question: Do You Need Extra Insurance For Airbnb

Are you getting your first short term rental ready and wondering do you need extra insurance for Airbnb? It can be confusing to understand what does AirCover and my home owners policy cover. 

In this post, I’ll go in depth on AirCover and what other insurance you will need to operate your Airbnb business. I’ll also show you what I do for my own properties.

This post is answering the question do you need extra insurance for Airbnb.

Do you need extra insurance for Airbnb?

AirCover

AirCover details

Let’s go over the AirCover details first. Now, if you’re brand new to Airbnb you may not even know what I’m talking about. As described by Airbnb “AirCover for Hosts is top-to-bottom protection for hosts.” Here’s what’s included:

• Guest identity verification
• Reservation screening
• Host liability insurance, up to $1 million
• Host damage protection, up to $3 million
• 24 hour safety hotline
• Experiences liability insurance, up to $1 million (We won’t talk about this but you can dive deeper about Airbnb experiences here)

AirCover cost

AirCover is offered to every host and is included in the service fee charged by Airbnb. So really, it’s at no additional cost to hosts and you are automatically enrolled in AirCover when you list your property on Airbnb. There are exceptions for hosts outside the US but you can read about that on Airbnb’s website.

For more info on Airbnb fee breakdown, read this article!

AirCover for guests

Now, AirCover is not just for the hosts, but for guests as well. This gives guests extra protection in the event a host cancels their reservation, the listing is inaccurate compared to the profile on Airbnb, they are unable to check in or reach the host.

All of this coverage is what gives guests peace of mind when booking with Airbnb but be warned. If a guest needs to use this version of AirCover for guests, Airbnb will penalize you as the host.

What is not included in AirCover?

Now, AirCover is great but as a host you actually do need more insurance than just what Airbnb provides through AirCover. Here’s what AirCover does NOT cover:

• Short term rental stays booked on other OTAs
• Lost business revenue
• Damages related to anything other than a guest (think weather, contractors, handyman, cleaners are covered though!)
• Liability over $1 million
• Damages over $3 million

It is key to make sure your business is protected and that you can capture bookings through other platforms like direct bookings, VRBO, Booking.com and more!

Bonus: VRBO hosting insurance

A lot of Airbnb hosts cross post to other OTAs and a popular one is VRBO. VRBO does offer hosts liability insurance up to $1 million but it does not cover damages done to an owners property. The VRBO liability insurance covers damages done to a third party by a guest staying at your property and any guest injuries.

Short term rental insurance

I have covered what AirCover is and what it not. So let’s dive into short term rental insurance.

So what is it exactly and how does it differ from home owners policies? Short term rental insurance is for anyone offering temporary housing to a transient guest who is paying a nightly rate. It’s different than a landlord policy because it caters towards hosts that will be welcoming many different guests over one long term tenant.

It also provides liability protection, personal property protection and your home. In many cases, carriers will require you to have short term rental insurance in addition to your regular home owners insurance policy and other carriers will be able to bundle the two in one product.

It is vital for an Airbnb business because it will cover loss of income when you are not able to rent your house out on Airbnb due to extended repairs needed from bad guests or weather (Think tornado, hurricane, hail damage).

It will also be another layer of protection for liability in addition to AirCover. If you’re in a sue-happy state, the $1 million in liability that is offered by AirCover may not be enough for extreme circumstances that can arise with guest.

In my home state of California, there has been some WILD Airbnb guest stories and it terrifies me to think that a guest could be this bad. But it happens and you do not want to be the next victim.

Next steps to cover yourself

Next steps are for you to call your home insurance agent and check with them on what is covered. If they tell you that an additional policy is needed to be covered, take action and get that policy in place.

If you are looking to host hundreds of guests and grow your portfolio, additional insurance may be a good idea.

What insurance policy’s do I have for my properties

So I do not host guests on any other platform other than Airbnb because of AirCover. All of my short term rental properties are in areas that Airbnb has great coverage of. So for simplicity sake, I only use the one platform. For those of you that have large portfolios probably think I’m leaving money on the table, I get it. But it keeps it super simple for me and overall costs low because I’m able to automate my business directly on the platform.

I have short term rental policies on all my Airbnb’s and have an umbrella insurance policy in place for extra coverage. And by hosting on Airbnb, I have AirCover. Talk about a great stack of coverage! I feel very safe and comfortable hosting a wide variety of guests with this coverage plan in place.

Check with your insurance agent on what they would recommend for your specific scenario!

How do you protect your business? Let me know in the comments below!

Disclaimer: This is not legal or financial advise, rather just one Airbnb hosts’ opinion on the type of insurance that is needed to run a successful and stress free short term rental portfolio. Consult with your lawyer and insurance agent about your personal situation.

This post is answering the question do you need extra insurance for Airbnb.