Home sharing service Airbnb now offers free Host Protection Insurance (HPI). Although HPI covers up to $1M per incident, don't expect it to be enough protection. The liability policy, like those offered by other vacation rental sites, is secondary to homeowners property insurance, meaning it kicks in if a third-party bodily injury or property damage claim is denied by the homeowner's policy.
What Does HPI Cover?
- Damage to the physical structure of the home
- Onsite injury to a guest
- Onsite injury to a third party
What HPI Doesn't Cover
- Damage to homeowner's personal property, intentional or accidental
- Damage to renter's personal property
- Loss of earnings
- Fungi, bacteria or bed bugs
- Communicable diseases
- Illness due to the home (i.e. asbestos, lead etc.)
- Acts of terrorism
- Natural disasters
What this means is, if a renter damages the structure, HPI can cover the costs. But if your guest trashes your furnishings, you're out of luck as far as the HPI is concerned.
How to Be Fully Protected
Although those items not covered by HPI might be protected by homeowner's insurance if you have the right supplemental policies. With basic home insurance your claim will be disqualified if your property is considered a business. Also, if you don't reside on the property it will not be considered an insured location.
So what's the answer to your dilemma? Acquire a commercial policy. A Landlord and Insurance policy includes protection for the home from fire, theft, vandalism and more; liability protection for personal and bodily injury as well as property damage; and medical payments should someone be injured on the property. Landlord insurance does not cover a renter's personal property.
Before listing your home on Airbnb or other home sharing site, consider your insurance needs. To learn more about landlord insurance and compare quotes go here.
More extensive protection is available including open peril insurance, which provides more comprehensive coverage.
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