Understanding the Airbnb Host Guarantee Policy and Airbnb Host Protection Insurance
“What do hospital gowns and insurance policies have in common?
You’re never as covered as much as you think you are!”
This joke might be cheesy but it’s undoubtedly true. Insurance is one of those things that everyone needs and has but no one understands. Have you ever tried to read an insurance wording? The language is archaic and even underwriters have a hard time understanding the very products they are trying to underwrite. Luckily we’ve put the hard work in to de-mystify Airbnb’s Host Guarantee Policy and the Airbnb Host Protection Insurance.
Today we’ll cover just the Airbnb Host Guarantee Policy in detail and in our next post, we’ll cover the Airbnb Host Protection Insurance.
In the meantime, here’s a quick reference chart of the differences between the two.
Airbnb Host Guarantee Policy
What does it cover?
First party (i.e. host) property damage caused by Airbnb guests up to $1,000,000 USD above the security deposit or if no security deposit is in place.
Let’s look at two important definitions under the Host Guarantee Policy:
“Guest” means a Member who has completed Airbnb’s account registration process, has agreed to the Airbnb Terms of Service, and who books and stays on, at, or in a Covered Accommodation for the period of the Listing.
“Host” means a Member who has completed Airbnb’s account registration process, has agreed to the Airbnb Terms of Service, and who lists his/her Covered Accommodation(s) on the Site or Application.
Why are these two definitions important? You must be defined as a host and your guest must be defined as a guest to be eligible under the Host Guarantee Policy.
That means your guest must be booked for the full stay on the Airbnb site. If you have booked part of the stay offline and the damage occurs after the Airbnb portion has ended, you will not qualify under the Host Guarantee Policy.
As a host, you must ensure that you’ve completed Airbnb’s registration process, agreed to Airbnb’s Terms of Service and have your listing listed on Airbnb. I believe it’s impossible to actually host without completing these so as long as you’re an active host, you should be fine.
What does it not cover/exclude?
- Currency, cash/money, precious metal in bullion form or notes
- Rare artwork
- Wear and tear on the property (e.g. roofing starts to fall apart due to usual rainy weather)
- Personal liability
These are standard property exclusions for commercial insurance policies. However, Airbnb has specifically noted that the Airbnb Host Guarantee Policy is not an insurance policy. I believe they are backed by Lloyd’s of London for a Commercial Insurance policy which pays for the damages under the Host Guarantee Policy but the insured (beneficiary) is Airbnb and not hosts so if there is a claim made by a host, Airbnb would make a claim to their insurance company and then reimburse the host if they deem it covered.
The Host Guarantee Program is not intended to replace your homeowners or renter’s/tenant’s insurance policy. You must review your own insurance policy to determine if damage or loss to property due to a guest renting your space will be covered. I would highly recommend that you have your own insurance policy in place that allows for short-term rentals as this is the best way to ensure that you are adequately covered in case of property damage from guests. You also need to consider that $1,000,000 USD limit may not be enough coverage if you are relying on this as your sole or primary recourse. In large cities, detached homes can easily exceed the $1,000,000 USD limit.
Why you should have your own insurance and not rely on Airbnb’s Host Guarantee Policy:
- Airbnb is in no way obligated to pay out under this policy, especially if you cannot prove the guest damaged your property
- If a guest burns down your house, Airbnb may not pay up to the full limit of $1,000,000
- $1,000,000 USD may not be enough to rebuild your home to the same size and finishes as what you originally had
- The Host Guarantee Program only pays for damages caused by a guest – any damages to your home due to other reasons (water damage, earthquake, wind, smoke etc) is not covered so you have a large gap in coverage when it comes to your home
What is the Host Guarantee Process and how do I submit a payment request?
If it is an emergency situation:
- Contact policy, emergency personnel or the proper authorities
- Contact Airbnb Customer Service
If it is a non-emergency situation:
- Contact the guest to notify them of your issue and try and negotiate a resolution within the earlier of 14 days after the check-out date or before your next guest checks in.
2. If the host and guest cannot come to a resolution within 72 hours after first contacting your guest, the host should review the Host Guarantee terms and see if they are eligible to request payment before submitting a request to Airbnb.
3. If you are eligible for the Host Guarantee, you must submit your request within 30 days of the loss to be eligible for the Host Guarantee Policy.
4. Airbnb recommends that you file a police report for the damages. A police report is encouraged in all cases and is required for payment requests over $300 USD.
5. Submit your payment request and provide as much documentation as possible in your request. Documentation should include:
- Photographs of the damage
- A police report for damages over $300 USD
- Receipts or some other indication of fair market value/actual cash value (e.g. Craigslist ads, online ads etc) and replacement cost
- Proof of ownership (e.g. receipt, photos of the item in your listing etc)
- Any other documentation you feel will aid your case
6. Once requests are submitted, a confirmation email and follow up emails to discuss next steps (e.g. documentation from host or guest) will be sent from Airbnb within 24 hours.
7. Once sufficient info is received, Airbnb will review all the documentation, evaluate the request/claim and contact the host with their decision***.
***If you’ve received any kind of compensation/reimbursement from a guest and/or your primary insurance company, Airbnb’s Host Guarantee is considered excess coverage and any remaining payment from Airbnb will take into account the money you’ve already been reimbursed and could reduce your payment accordingly.
How long will it take for your request to be processed?
Airbnb strives to resolve most cases within a week of submission. However, the length of the process will vary depending on severity, quality of documentation and co-operation of the host and the guest. We’ve seen on average up to 3 months to have payment resolved.
If you have any questions about specific parts of the Host Guarantee Terms, feel free to ask and I will do my best to answer.