Making your home available through a home-sharing service such as Airbnb is a great way to supplement your income. However, not having the right insurance can turn a home-share into a drain on your income. Standard homeowners insurance and the coverage that home-share companies provide give you some protection, but each have their limits. Here’s what you need to know about home insurance for Airbnb and other home-share services.

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Does standard homeowners insurance cover Airbnb?

Most standard homeowners insurance policies exclude coverage for damage and injuries resulting from business activities, which can include renting your home through a home-share service such as Airbandb.

The exclusions typically apply to the personal property and liability coverages in your policy. Your dwelling coverage pays to repair or rebuild your home if it is damaged by a covered peril such as a fire or windstorm, even if it occurs with home-share guests inside.

However, if a home-share guest damages your belongings or gets hurt on your property, standard home insurance may not pay to repair your items or treat the guest’s injuries.

The specific details of home-share exclusions vary by insurance company. This is why it’s best to contact your insurance agent to see if your policy covers home-share activities and/or if you need extra coverage.

How does Airbnb’s insurance work?

Airbnb’s recently updated AirCover for Hosts program provides hosts with up to $1 million in property damage coverage and $1 million in liability protection for all stays at no additional cost.

AirCover’s damage protection includes coverage for:

  • Damage a guest causes to your home or belongings during an Airbnb stay
  • Unexpected cleaning costs resulting from an Airbnb stay
  • Lost rental income if you have to cancel future bookings while repairing damage from an Airbnb stay 

AirCover’s liability protection includes coverage for:

  • Bodily injury to a guest or a guest’s invitees
  • Damage or theft of property belonging to a guest
  • Damage caused by a guest to common areas such as a lobby or nearby property

For some hosts, this may be all the additional coverage you need for home-sharing. However, it’s important to know that AirCover is not meant to serve as a substitute for homeowners insurance, because it only applies to Airbnb stays.

For example, if a loose railing in your home causes an Airbnb guest to fall down a staircase, AirCover’s liability protection is likely to cover the guest’s medical expenses.

However, AirCover does not cover injuries to someone performing repairs or maintenance on the home or a guest you invite over for a friendly visit. Under these circumstances, the liability coverage in your home’s regular insurance policy typically applies.

Are there limitations on Airbnb’s AirCover insurance?

While the coverage Airbnb provides is extremely valuable, here are key things to know about AirCover’s limitations: 

  • AirCover does not cover theft of your personal belongings from the home-share.
  • AirCover typically covers damaged belongings at actual cash value, which is their value after depreciation. This gives you less protection than replacement cost coverage, which replaces destroyed items with new ones.
  • Airbnb’s insurance does not cover original fine arts and antiques, unless comparable replacements are available. If you furnish your home-share with fine arts and antiques, consider adding them to a rider or floater.

Airbnb insurance vs. Vrbo insurance

Like Airbnb, Vrbo also provides hosts with up to $1 million in liability coverage at no extra cost, but Vrbo’s property damage coverage is extremely limited.

Vrbo’s liability insurance works in tandem with your homeowners liability insurance.

If a guest gets hurt on your property or damages a neighbor’s property, Vrbo may share the costs of settling the claim with your home insurance provider.

However, if your homeowners insurance excludes home-sharing activities, Vrbo requires you to cover 25% of the claim out of your own pocket.

Vrbo does not offer insurance for your belongings, per se, but a Vrbo host can require guests to purchase a damage-protection plan. Damage protection covers accidental damage in the home, such as a broken window or lamp.

The coverage limits for Vrbo’s damage protection range from $1,500 to $5,000, at prices ranging from $59 to $99. Even when not required by a host, a Vrbo guest can purchase damage protection on a voluntary basis.

Home insurance endorsements and coverages for Airbnb hosts

Home insurance companies offer endorsements and other coverage options to fill gaps that exist in both standard homeowners insurance and the coverage that Airbnb and other home-share companies provide.

The best insurance option for your home-share depends largely on how often you reside in the home and how frequently you rent it out.

For example, if you make space in your primary residence available every now and then, you may only need to add a home-share endorsement to your existing homeowners insurance. On the other hand, if you frequently rent out a second home as a home-share, you may need commercial insurance.

Home-share insurance endorsement

Some insurance companies, including Allstate, Farmers and Liberty Mutual, offer a home-share endorsement that you can add to an existing home insurance policy with the same company. 

Though the specific terms vary by company, home-share endorsements typically extend the home’s personal property and liability coverage to home-sharing.

The personal property coverage in a home-share endorsement generally includes coverage for theft of your belongings by home-share guests, which Airbnb does not cover. Some home-share endorsements cover theft of a home-share guest’s belongings during a stay in your home, too, which is also covered by Airbnb.

Some home-share endorsements include an income-loss benefit, which covers lost revenues if damage from a covered peril, such as fire or windstorm, prevents you from accepting home-share bookings during repairs. AirCover’s lost-bookings benefit only applies to damage resulting from an Airbnb stay.

A home-share endorsement is best if: You rent out space in your primary residence to home-share guests, particularly if you use a service other than Airbnb. Depending on your insurance company, you may be able to add this endorsement to a second home that you occasionally rent out to home-share guests or other short-term renters.

Commercial insurance

If you have a second home that you rent to home-share guests on a frequent basis, you may need commercial insurance, even if you use Airbnb.

Commercial insurance provides year-round coverage for damage to the home, its contents and potential liability claims, whether the home is being used as a home-share, occupied by you or vacant.

Some companies offer customized commercial insurance packages designed specifically for short-term rentals such as home-shares. Vrbo recommends Proper Insurance, which is backed by Lloyds of London.

If the home is a full-time home-share, you may need to purchase a hotel or bed-and-breakfast policy, which are forms of commercial insurance for homes rented out for short-term stays year-round.

Did you know: The insurance you need for short-term rentals such as home-shares is different from landlord insurance? Landlord insurance is designed for homes rented to a tenant on a long-term basis. Home-share visits typically only last a few days or weeks.

Does condo or renters insurance cover Airbnb rentals?

Like standard homeowners insurance, condo unit-owners insurance and renters insurance generally contain exclusions on Airbnb rentals and other business activities.

If your policy contains such exclusions, the property and liability coverage in your condo or renters insurance policy may not apply to damage or injuries resulting from a home-share stay.

Several insurance companies offer a home-share endorsement for condo insurance policies, but home-share endorsements for renters insurance are less common.

If you plan to make your condo unit available as an Airbnb, you should make sure home-sharing does not violate your homeowners association (HOA) bylaws. Similarly, if you plan to make space in your rental unit available on Airbnb, you should make sure such activity is not prohibited by your lease.

In addition to exposing you to potential sanctions from your HOA or landlord, operating an unauthorized home-share may leave you ineligible for any insurance coverage provided by the home-share company.

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