Last week we discussed the short-term rental insurance requirement enforced in D.C. Des Moines is another city requiring hosts to secure liability insurance at a minimum of $500,000. “Such coverage shall defend and indemnify the owner, any named additional insured, and any tenants in the building for their bodily injury and property damage arising from the short-term rental use.” According to the City, hosts may choose to secure this coverage through designated listing platforms. Read more as we compare the coverage offered through listing platforms versus a comprehensive commercial package policy.
What hosts should know about Airbnb/HomeAway host protection
As you know, HomeAway and Airbnb are offering $1M in free liability insurance for all bookings processed via their websites. Airbnb first launched the Airbnb Host Protection a few years ago, stating that any booking via Airbnb is automatically covered with $1M of liability coverage. Not long ago, HomeAway began offering something similar.
Is there coverage in place?
Yes, there is coverage in place but as with anything in life that is free, there are exclusions and verbiage that can’t be ignored should they decide to cover your claim in the first place.
Check out the FAQ on the HomeAway Community Blog.
Do listing platforms provide property coverage?
First, it’s important to understand this is for liability coverage, and does not cover property damage, i.e. a guest accidentally sets fire to your rental, or vandalizes or steals your personal property. There is no coverage for water damage, wind damage, or anything property related at all. Also, there is no coverage for lost income in the event of a property claim, such as fire, water damage, or theft. This means hosts must still maintain a property insurance policy that will respond to property damage in general and property damage caused by a guest.
Do listing platforms provide liability coverage?
Secondly, there are liability exclusions found in both the Airbnb Host Protection and the HomeAway offering that are not standard in commercial general liability. One is personal and advertising injury, which is excluded from both. This means there is no coverage for “invasion of privacy” which is a common claim in the short-term rental world, and one that carriers have had to defend. The U.S. is a litigious society and guests can sue for just about anything, with invasion of privacy being an easy suit.
Even more concerning is the fact Airbnb excludes assault, battery, sexual molestation, communicable disease, and much more. Liquor liability is also a standard exclusion in all commercial general liability, so unless it’s specifically endorsed and added to the policy, there is no coverage.
Comprehensive liability and property coverage
The bottom line is nothing in life is free, and free HomeAway and Airbnb liability coverage is simply a way for them to better compete and get more bookings done through their website. As a vacation rental owner, you should feel good about purchasing and paying for the Proper Insurance policy, and having comprehensive coverage for both property and liability, including your building(s), contents, income, and $1M of commercial general liability.
Click here to view other cities implementing liability insurance requirements such as Washington D.C. Hosts should also be educated as to the top claims they are most likely to encounter while short-term renting their property.
Give Proper a call today to discuss their comprehensive policy for short-term rental properties – (888) 631-6680!