If you’re an Airbnb host, it’s possible that you’ve thought about getting insurance to help protect you from liability and other risks associated with renting out your home to strangers. But what kind of insurance do you need? And can you get coverage with the same company that insures your real estate investments? In this post, we’ll answer all of these questions and more by looking at the different types of insurance available to Airbnb hosts and what kinds of coverage you should look into getting.
What is Airbnb insurance?
Airbnb insurance is a type of real estate insurance that covers liability and damage to your property in the case of an accident. It also covers any out-of-pocket expenses incurred by guests due to mishaps on your property. There are different ways to layer on insurance for short term guests from having a stay-specific policy, a real estate policy, a business policy, and/or a personal liability policy.
Obviously there is a wide range of what constitutes Airbnb or short term rental insurance, which is why we’re writing this blog!
What does Airbnb insurance cover?
Short term rental or Airbnb insurance covers liability, property, and personal injury. Liability coverage will protect you from lawsuits and claims. Property coverage is in case your home is damaged or stolen due to a guest’s actions. Personal injury coverage is in case someone gets injured on your property or has their belongings stolen.
How much does Airbnb insurance cost?
Airbnb insurance can cost anywhere from $2,000-$3,000 a year. The cost depends on the type of coverage you are looking for and the number of units you own. Not to mention the value of the property and the furnishings within.
The cost can also be broken out by stay and collected as a fee from the guest. While there are cost benefits to you that are seen, there are also hidden downsides that are unseen like reduced bookings.
Do I need Airbnb insurance if I have a regular homeowners policy?
If you are renting out your home, condo or other type of property on a short-term basis, then yes! There are two ways that you can go about this. The first is to buy a real estate insurance policy with what is called an Endorsement C which will cover both the building and the contents. The second way would be to add what is called a Personal umbrella liability policy which will typically provide coverage up to one million dollars in personal liability claims such as bodily injury and property damage. And even if you have renter’s insurance, it will not cover any liabilities incurred from your renters. Every specific use case will vary depending on your risk tolerance, property conditions, and many other factors.
What if I have multiple short-term rental properties?
If you have multiple short-term rental properties, then we highly recommend purchasing a business insurance policy that includes umbrella insurance. Umbrella insurance covers your liability and any claims over the limit of your primary coverage. This can really help protect you personally in case of a severe accident. The more properties you have, the more affordable and useful an umbrella policy becomes. We wouldn’t necessarily recommend a policy for those with three or fewer properties.
How do I get Airbnb insurance?
There are three types of insurance you can get for your short term rental: real estate, business, and personal liability. Real estate insurance is required by law in most states. Business coverage protects you from lawsuits if someone is injured or has their property damaged at your rental. Personal liability coverage covers damages to the renter’s personal property and provides legal representation if a lawsuit is filed against the host. Umbrella insurance may be necessary in certain areas because it can cover all three types of insurance as well as your home’s contents, car and more!
Conclusion – what should I do now?
What should I do now? Make sure you review your homeowners policy to ensure that they will cover any liabilities related to hosting guests at your property. If they don’t, then adding an umbrella policy is a good option so that you have peace of mind when renting out your house on Airbnb or other short-term sites. Or talk to one of us today to get a better understanding of what you should do next.