Thinking about renting your home on Air BnB or already doing so? Are you wondering if your home insurance will cover you? If you’ve looked into this extra revenue stream you may be aware of the risks associated with having strangers living in your home; so how can you protect yourself against these risks? Although Air BnB offers some risk management solutions, like many insurance products, it can be difficult to understand how you’ll be covered in different situations. Your current home insurance may be of advantage depending on policy features specifically dealing with short term rentals.
Evaluate Your Current Home Insurance Cover
If you decide to rent your home on Air BnB, you should talk to your broker first. Most standard homeowners’ policies have exclusions for short term rentals. This type of rental is seen as a business and should you choose to rent your space you may be at risk of being denied coverage or worse, having your policy cancelled for failing to disclose your business venture. This means your property might not be protected.
With the success of Air BnB, there has been an increase in home-sharing sites on the Internet. While homeowners are intrigued by the idea of making an extra buck, they are also seeking affordable ways to protect their property from accidental or intentional damage. Some of the larger and more established players in the home-sharing space are offering risk management options. However, a closer look at them will reveal that they fail to cover all corners. So if you are considering putting your home up for a vacation rental, you need to dig deeper. Let’s explore some risk management options of one of the first and largest players in home-sharing, Air BnB.
Evaluating Air BnB’s Risk Management Options
Air BnB’s two risk management options include the Host Guarantee and the Air BnB Host Protection Insurance. Both options offer coverage for various aspects and may be used separately or in conjunction with each other. There are many important differences between these two options and you must gain an in-depth understanding of how they work. The Host Guarantee is a free solution while Host Protection Insurance is available at an additional cost.
The Host Guarantee is not insurance. It is an alternative risk management solution that comes into play only after dipping, seeking relief from your standard homeowners’ policy, (which might not have anything to offer you) and your guest’s insurance. The Host Guarantee does not cover personal liability (if someone is injured on your property), or cash, collectibles or pets in the space. It does, however, cover intentional damages to your home or property. Home insurance policies typically cover only accidental damages so the Host Guarantee does fill in that gap. If you are dissatisfied with these gaps and are seeking for more coverage options, you might also consider Host Protection Insurance.
Host Protection Insurance
Host Protection Insurance is Air BnB’s other risk management offering. It is an additional piece of coverage offered in Canada and select countries. This policy is an extension of your regular home insurance policy and takes precedence regarding any situation involving Air BnB. It covers up to $1 million in damages including liability, something not covered by the Host Guarantee, and excludes intentional liability, abuse, loss of earnings, and structural issues. The insurance is provided through Lloyd’s of London; a reputable long-standing insurance market.
Missing from both of these protections are accidental damages to your home while hosting guests. This type of risk is typically covered by your home insurance policy, but since most home policies don’t cover business activities in the home you should speak to your broker about the options available to you.
Aviva’s Home Insurance Plan For Protecting Hosts
On February 1, 2017 insurance company, Aviva launched new coverage to offer Air BnB and other home sharing hosts protection that is designed to fill in all of the gaps left in the above-mentioned coverages. It covers liability, loss or damage to your home or personal property, criminal acts, intentional acts or failure to act by guests, loss or damage to guest’s property (up to $1500) and loss of rental income.
Disruptive innovations are changing the way we live and do business. Companies are now expected to restructure their offerings in the light of these emerging business models and business trends. Like Aviva, some other players are also introducing home insurance plans specifically for home-sharing business models.
Speaking with a broker is the best way to ensure you have all of the coverage you need. They will present you with the best options for your situation. Now is the perfect time to ask questions and get a better understanding of how you’re protected by your policy.
For more information and advice on having the proper coverage for your new business call us at Navigators Insurance.