When you have a property to rent, it is crucial to ensure that you have the appropriate insurance to protect yourself from possible damages caused by a guest. These can include damage to personal belongings or property itself, business impact and even bodily injury.
You may already be familiar with home and property insurance. But as a host, you’ll also need to protect yourself!
We are going to touch on different points to help you find the right insurance. Let’s start.
An Overview of Homeowners Insurance
When dealing with a short-term rental property, insurance is a necessity for a number of reasons.
Homeowners insurance is intended to protect your personal property, possessions, and even yourself as a host from damage. However, this is not the only reason why it is necessary to have it.
Most, if not all, mortgage companies require that you have insurance that covers the value of the property or the purchase price. Without this insurance you may not be able to obtain a loan transaction.
You can also get homeowners insurance even if you don’t own your home. Landlords often require rental insurance.
Rental insurance is a policy that provides liability protection against claims for bodily injury or property damage caused by a guest or their company.
However, there is more to consider than home insurance. You should consider the right insurance for other scenarios that may occur.
What insurance do you need as a host?
Host protection insurance is generally a liability policy that provides coverage for physical or property damage claims initiated by a third party. They usually cover up to a million dollars for each case.
Most home rental platforms have their own insurance policy for hosts. However, these won’t always cover everything you’ll need as an Airbnb host.
In this case, you can look for an independent insurance company that offers coverage for what the housing sharing platform host protection insurance does not provide. For our UK clients we would recommend Guardhog as they cover most of the unexpected situations that you may not have considered!
Liability insurance
The host protection insurance provided by the home sharing platform typically only covers claims during a guest’s stay at your property.
If other claims arise that are not related to ownership or a reservation, your platform will not be able to protect you. That’s where liability insurance comes in.
This insurance offers coverage for cases in which a third party files a claim for injuries or damages within or because of their property. Therefore, you would not be the one to provide the compensation directly.
Reservation Revenue Loss Guarantee
There are cases where reservations are lost or you cannot stay for a certain period due to certain damages. Some examples are fires or long-term supply problems.
However, the host protection insurance policy states that the loss of income will not be covered by the shared housing service.
Please note that there is a limit to how much insurance coverage you can claim and when. In any case, this insurance helps keep your income flowing despite not having guests for a while.
Property and Furniture Insurance
As we have already said, most of the shared housing platforms only cover what is related to reservations and not the property itself. Although your host protection insurance covers most cases, it does have its limits.
Shared housing insurance does not cover property damage caused by weather conditions and other similar external elements. Nor will it cover damage to furniture that is not related to your guest’s reservation.
This type of damage affects your short-term rental business more than you think. Although they seem unlikely, they could lead to a decrease in the value of the property. Having an insurance policy for this will surely be worth it.
Home Emergency Insurance
Like loss of income insurance and property and furniture insurance, emergency home insurance focuses on providing coverage for damage emergencies.
It also provides a 24-hour phone number to call if anything comes up. You can get someone to make temporary repairs before it gets any worse, thus avoiding interruption to your guests’ stay.
Accidental Damage Insurance
Accidents are not predictable, so there is no telling when they may need to be covered. The best option to face them is to always be prepared.
Most insurance companies offer coverage for accident damage in case the accident cannot be covered by the insurance of your shared housing platform.
What to Consider When Getting the Right Insurance
When getting property insurance, take a good look at what it covers. Although it is best to get a policy for everything related to the property, it could cost a lot.
Instead, choose an insurance policy that covers exactly what you need. Insurance companies offer various types, so it is necessary to consider each of them before choosing them.
For example, most shared housing platforms do not cover loss of income. Some liability insurance may cover damage, but not theft.
How to Get Home Exchange Insurance
With shared housing service platforms you can get insurance directly or through an independent insurance company.
The insurance policy of each of them varies depending on the different properties. Here are some of them:
Airbnb insurance
When a property is published on this platform, it is automatically included in the Airbnb insurance or protection for hosts, which offers civil liability coverage of up to one million dollars.
Although it covers your liability for injury or damage to a guest, it will not cover anything related to your belongings or personal property beyond the stay or reservation.
It’s important to note that Airbnb’s insurance differs from its host guarantee, which is a separate program to help Airbnb hosts cover damage to property or personal belongings caused by guests.
Vrbo Insurance
Additionally, Vrbo also automatically offers $1 million of liability coverage when the listing is on their platform.
If your property or unit already has liability insurance, Vrbo will provide you with additional liability coverage.
However, Vrbo only offers this type of insurance policy. So if you want property and contents insurance coverage, you have to opt for an additional insurance company.
Third Party Insurance Company
Independent home insurance companies often offer short-term rental insurance options that platforms don’t offer.
Different insurance companies have different policy options. When looking for a third party insurance company, read their insurance policy carefully to make sure it suits your needs.
Some of the recommended companies are Proper Insurance, Allstate, Liberty Mutual, Nationwide and our favourite Guardhog.
Conclusion
So whether you’re a new host or an experienced Airbnb host, make sure you have the right insurance. Our guide has everything you need to know about short-term rental insurance and how to get the policy you need.
