How do I insure an Airbnb?

A lot of people who travel are looking for alternatives to hotels, which is how Airbnb took off into a thriving business. It might seem like a quick and easy way to make some money, especially if you’ve got a place in an ideal area where people are going to want to stay. However, that begs the question – how do you insure an Airbnb? Getting insurance for an Airbnb might seem complicated, but we’re going to go over the basics.

How do I insure an Airbnb?

Many insurance companies consider regular Airbnb renting to be commercial use of the property, which means that Airbnb hosts generally need to get a commercial insurance policy to be properly covered. The thing is that home insurance is meant to protect you and your family. It doesn’t account for the risks of commercial home renting. The risks that you face when renters use your home weren’t taken into consideration when your owner-occupied primary homeowner’s policy was written. That means that home insurance would have some significant gaps when it comes to coverage for an Airbnb.

It’s important to make sure that the insurance you choose will provide enough protection for the structure of the Airbnb itself and for your personal property. (You can probably choose the amount of coverage you want for your personal property – for example, you could choose to have $10,000 of personal property coverage.) Be sure to check and see which losses are covered and which are not. Typically, losses like theft, fire, hail, wind, and water damage (NOT from flooding, however) are covered.

Anyways, be sure to take the time to read through the policy, and make sure you don’t skip the fine print. Yes, it might not be riveting, but slogging through the policy is a worthy sacrifice.

Getting insurance for an Airbnb

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What if I live in the home and rent out a section of the house?

If you’re living in your house but you have a unit that you rent out as Airbnb, things can get a little more complicated when it comes to your insurance. It’s a good idea to talk to your home insurance agent to see what your company says about short-term rentals like this. You may just need to add an endorsement to your home insurance policy, but your agent can help you get the right coverage based on what your carrier stipulates. (The endorsement would basically let them know who’s there and distinguish occupancy of the house.)

What will an agent need to know to get a quote?

An agent is going to need some detailed information to get a quote for insurance for your Airbnb. They need to know how much of a risk it would be to insure you so they can set your rates accordingly. Here are some of the questions you should be prepared to answer when going through the quoting process:

  • Is the property deeded in your name, or is it under a business name like an LLC?
  • How many units are in the home?
  • For what time period will you be renting the home? What is the minimum stay?
  • What’s the address?
  • What’s the square footage?
  • How many bathrooms?
  • What kind of finishes are in the home – custom, builder-grade, etc.
  • If the home is over 40 years old, has the plumbing, electrical, and AC been updated?
  • How old is the roof?
  • What deductible would you like?
  • How much personal property coverage do you need?

The reason the agent needs to ask all these questions is that these factors can affect your rates. Things like the ZIP code, your loss history, the age of the home, the amount of coverage you need, and where you’re located (especially if you’re near a coast) can indicate how much of a risk you are to insure.

So, yes, it might seem like there’s a laundry list of questions you’ll need to answer, but it’s all so that you can get the most accurate quote possible.

Local laws and regulations.

Another thing you’ve got to be aware of as an Airbnb host is the fact that many states, cities, and towns have rules and regulations about short-term property rentals – like Airbnb. Be sure to check out any relevant rules for your area and adhere to them so that you’re not accidentally breaking them. You probably don’t want to get a fine, right? It’s your job as the host who’s renting out the accommodations to make sure you’re following the guidelines specified by your area.

What about coverage from Airbnb?

So, you might also be wondering about the coverage offered by Airbnb itself. Airbnb offers Host Guarantee and Host Protection.

  • Host Guarantee – This offers $1 million of coverage for eligible hosts if there’s damage to their property caused by a guest. The amount of damage has to be more than the deposit. However, Airbnb is very clear – this does NOT take the place of insurance. It’s still important to get the coverage you need for your Airbnb. (This coverage has many exclusions and conditions, so it’s a good idea to read some reviews and do some research about it.)
  • Host Protection Insurance – This offers $1 million of liability coverage per occurrence in the event that there’s a third-party claim of bodily injury/property damage related to an Airbnb stay.

Even with these two programs from Airbnb, it’s important to make sure that you get the coverage you need. You probably don’t want to rely solely on these two programs to cover your Airbnb; you might have noticed that these two coverages don’t mention anything about protecting the dwelling itself against perils like fire, hail, wind, and so on.

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Those are the basics of getting insurance for an Airbnb. Remember, it’s important to make sure that you’re properly covered. If you’re looking for insurance for your Airbnb, our team would be happy to help. We’re here to help you get the insurance you need at the best possible rate. Get started on quotes for your Airbnb by filling out our online quote form, giving us a call, or messaging us on LiveChat.