Most hosts do not have Airbnb liability insurance. It's one of those things that get overlooked. Truth be told, I've never had it either. It's boring, it costs money and chances are you'll never need it anyway. So why bother? The answer is: if something does happen to your guests during their stay, you could be in big trouble.
But I have a homeowner's or landlord's insurance policy, doesn't that cover me? Unfortunately the answer is probably a no. Homeowner's and landlord's policies usually carry a “business activity exclusion,” which means that claims involving a business activity can be denied. Since most insurance companies consider Airbnb hosting a business, your claim will likely be denied.
But wait, doesn't Airbnb protect their hosts? How about the Host Protection Insurance? Isn't this sufficient? Maybe. It's complicated and as always, the devil is in the details.
The Airbnb Host Protection Insurance: what does it cover?
First of all, to avoid confusing, the Host Protection Insurance is different from the Host Guarantee. The Host Guarantee policy protects hosts against damages done to their property by guests, but not against liability claims.
Let's look at what this insurance covers exactly and, more importantly, what it doesn't cover. I'm going to really dive in here, because a small misinterpretation or one little detail that gets overlooked could result in major financial trouble.
Let's look at the definition of the insurance, taken straight from the Airbnb website:
“The Host Protection Insurance (HPI) program now provides primary coverage for Airbnb hosts and landlords, as additional insureds, in over 15 countries. Our program protects against liability claims up to $1 million USD that occur in a listing, or on an Airbnb property, during a stay.”
This sounds pretty good, and for some hosts this may be enough, for other's it may not be.
You're not covered if:
- You're a host in a country that isn't covered. The program is available for hosts in Australia, Austria, Belgium, Canada, China, Croatia, Czech Republic, Finland, France, Germany, Hungary, India, Ireland, Israel, Italy, Japan, The Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, South Africa, Sweden, United Kingdom and United States.
- You're hosting guests outside of Airbnb. If you're using other platforms than Airbnb, you're not covered against claims from those guests. You're obviously also not covered if you're hosting guests from other sources.
- Something happens with your house while you don't have guests staying there. This is a tricky situation, Airbnb won't cover you as there are no guests staying and your homeowner's or landlord's policy won't cover you because you're running (in their eyes) a business from your house.
- Your situation falls under one of the many exceptions that are stated in the HPI policy. It's beyond the scope of this post to mention all of them, since there are a lot. I recommend to download the policy and study it carefully.
Even if you're covered under the HPI, there's a limit of $1 Million. That sounds like a lot, but if something really bad happens (a fire for example), hospital bills can add up. This could be a concern if you're hosting big groups. One person won't rack up a $1.5MM hospital bill, but if six people have to spend a few weeks in the hospital it adds up quickly.
Should you get additional Airbnb liability insurance?
In the end of the day whether you should get additional insurance depends on your risk appetite. Mine is pretty high and that's why I never got extra coverage. Other hosts may prefer an extra safety net for their own peace of mind.
The bottom line is, in order to make this choice, you have to understand what's covered under the different Airbnb programs and type of insurances that are out there.