Why a Homeowners Policy May Not Cover an Airbnb Rental

Q: I have been thinking about joining Airbnb as a host and would be renting out a Granny suite in my home. When I talked about it with some friends, they said I shouldn’t do it because it would invalidate my homeowner’s policy. Is this true and is there something I can do about it? I could really use the extra money.

 A: The answer is… sort of. The problem is inherent in the type of insurance. Homeowner’s insurance is for homeowners – not for landlords or business owners. If you are renting out the suite on a regular basis with making income as your stated purpose, that puts you in the landlord or business category. Let’s break down what you need to know about homeowner’s insurance, Airbnb and how you can best cover yourself in the event things go sideways.

First, Airbnb tells all of their prospective hosts that they offer insurance, but only of a specific type. The $1,000,000 Host Guarantee comes at no additional charge to the host, but it is explicitly stated that this insurance is not a substitute for a homeowner’s, landlord’s or business policy. Moreover, there are some things it does not cover as well as terms and conditions, limitations, and exclusions. Among the things explicitly not covered under the Host Guarantee are:

  •  Your pets.
  • Cash and securities.
  • Personal liability – such as your dog biting a guest, or a slip and fall in the bathroom.
  • Shared or common areas (ex: if you live in a condo/HOA and your guest is injured at the community pool.)

Airbnb offers a separate policy called Host Protection insurance that covers accidents such as those in a shared or common area, but exclusions and limitations still apply. Airbnb even recommends that you consult with your insurance agent in order to make sure that you have enough coverage and the right kind of coverage for what you’re doing. Insurance is not about covering things you know will happen, it’s about covering yourself against risks you didn’t even realize were possible. Beyond the occasional troublesome renter.

Talking to your insurance agent will help you refine your coverage so that between your own policies and those extended to Airbnb hosts, you and your guests are insured against all possible hazards. Call our licensed Florida independent agent today, and start getting to know what you need, what your options are, and what you’ll pay. You should also take time to become familiar with the laws governing short-term rentals in your HOA, city, and county. You could end up with a guest you can’t get rid of without an eviction proceeding, a whopping fine, or even a lawsuit. It’s a much better and more responsible decision than taking chances with your coverage as well as your home itself.