Airbnb Insurance Question

4 Replies

So I've been told if I really want to be able to put my unit up on Airbnb there's a special type of insurance I'll need. Can someone confirm this? I've had a tough time going through their site on this.

Tyler,

The first thing to do is contact your agent for your policy.  Find out if there is an exclusion for the rental.  If there is not coverage, the agent will need to check for coverage.  If you were just converting from an owned situation to fully rented the answer is easy.  You would convert the policy to a dwelling/fire form.  If you are renting it out part of the time and living there the rest of the time there is not a specific form.   We have a couple of markets that insure rented condos on the same form as owned units.  I will check with them and see if they can do the Airbnb situation.

@Tyler Horton Good for you for asking about this. Insurance is one of the most important aspects of starting up a short-term rental, and it's one of the most overlooked issues.

In my experience, it's almost a sure bet that your normal insurance carrier will NOT cover you for any claim arising out of an Airbnb-style short-term rental. I've heard of riders and other commercial policies you can get from normal carriers, but I'd steer clear. 

Go with a policy that is tailored to this type of rental. I know Proper Insurance has some great policies, and unlike others they will cover just a room rental and not just a whole-house rental. Slice is another good one, a start-up out of New York that offers on-demand insurance that covers you only if you're hosting. These companies have coverage areas that aren't in normal policies. 

You could opt for Airbnb's coverage, and I know people like @Ariel Vincent have had good experiences with it. But in my Airbnb seminars here in Denver I've also heard from hosts who weren't covered for some basic things, like bed bug remediation. 

The takeaway I also tell people is don't rely on your normal coverage and don't stick your head in the sand and hope. If you're going to run an Airbnb, get the right coverage for peace of mind.

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@Tyler Horton there are now insurance companies on the market that specialize in STR insurance. Slice charges a rate per day booked as well as Proper Insurance which has a more traditional structure. Hope this helps!

You should check out Proper Insurance.  They have dedicated short-term rental insurance.  Most homeowners policies have a business exclusion clause.  If they find out you are operating a vacation rental in your home, they can terminate your policy.