Last week I was quoting Airbnb, a leader in the emerging sharing economy. The company provides a way to connect travellers around the world so they can find a home base in a desired location, often at a lower price than hotels and as functional as their own home. It’s a different way to experience a new place you’d like to discover. There’s just one catch—the insurance. That’s before mentioning that Airbnb offers a Host Guarantee, which states the following: “Always included for Eligible Booking. Your peace of mind is priceless. So we don’t charge for it. Every eligible booking on Airbnb is protected by our Host Guarantee at no additional cost to you. Sleep easy. You’re worth it.”
Airbnb is clear about its Host Guarantee on several points: it is not an insurance policy and it does not replace the need for an insurance policy when dealing with Airbnb. Although its scope is impressive, we’ll show you why you need to get insurance even if Airbnb could cover the bill, in part or in whole, should an unfortunate event occur.
Basically, losses resulting from direct damage to insured property caused by the occupants during the rental period arranged through Airbnb are covered.
I would encourage you to read the full details HERE, but below is a non-exhaustive summary:
- Replacement value is not included: A claim will be payable according to the actual value of a property. For example, a sofa with an expected 10-year lifespan that was destroyed by an Airbnb user (visitor) when it was only 5 years old would be reimbursed at about half its value.
- The user/visitor must be the CAUSE of the damage. This means that, for example, an electrical fire for which the visitor holds no responsibility, but which occurred during a rental period will not be paid for by the Host Guarantee… and perhaps not by your insurer either (read last week’s blog).
- There is no mention of civil liability. For example, if a visitor holds you liable for a personal injury caused to a neighbour, that loss would not be covered under the Host Guarantee. Your liability as a host is not covered either, which means that a visitor who gets hurt on your premises could sue you.
- Several items are not covered or have limited coverage, including money, pets, works of art, etc.
- Identity theft is not covered (consult your broker to obtain this optional coverage, often at a low cost).
- Mysterious disappearances (i.e.: where is my laptop?) are also excluded from the guarantee.
- Lastly, this restriction will not affect everyone, but the Host Guarantee is limited to €800 000.
In the end, Airbnb’s Host Guarantee is a great complement to an insurance policy. It will enable you to avoid claims with your insurer; if you return home only to find out that your visitor was a bad seed, you should be compensated by Airbnb. However, I must reiterate that to ensure proper coverage, you MUST notify your insurer of your activities. Have a good trip!