Rental host? 4 things you might not know about the Airbnb Host Guarantee
So, you’ve decided to enter the exciting world of being a short term rental property host. That’s great! Who wouldn’t want to make a little extra money? In all likelihood you’ve chosen to list your property on one of the excellent platforms available in Canada like Airbnb, HomeAway, CanadaStays, or booking.com.
But whether you’re just starting out or you’re already a seasoned host, you probably have some pretty rational concerns about handing strangers the keys to your property. This is one of your biggest assets we’re talking about, and the news is never short on those “parties gone wrong” stories.
Those types of risks are partly why Airbnb and the other major rental platforms now offer “Host Guarantees”. But if you read them closely, you’ll notice that these aren’t insurance policies in the traditional sense. It might be more accurate to say they’re more like customer support programs. Airbnb is actually quite clear about this distinction:
“The Airbnb Host Guarantee is not an insurance policy. To the extent you desire protection beyond the Airbnb Host Guarantee, Airbnb strongly encourages you to purchase insurance that will cover you and your property for losses caused by Guests or Guests’ invitees in the event your loss is not within the terms of the Airbnb Host Guarantee.” – Host Guarantee Terms and Conditions
That seems like pretty good advice. In fact, there are four key issues with most Host Guarantees you should really know about before you list your place.
Problem 1: If your guest damages something, it’s often up to you to make the first attempt to get in touch with them for reimbursement
Scenario: Your guest accidentally clogs your toilet (yes, gross). Unfortunately, they then attempt to fix the problem by flushing the toilet continuously. The rapid overflow of water (and other less pleasant substances) results in thousands of dollars worth of damage to your bathroom.
So, what would happen?
Host Guarantees: Well, your Host Guarantee can only be used after you’ve tried (and failed) to recover damages directly from your guest. This puts you in the incredibly awkward position of trying to get in touch with your guest, and then politely asking them for money.
How would that conversation go exactly…?
“So hey there, if you could just e-transfer me $4000 dollars for the damage to the bathroom that would be really helpful. Oh, and please don’t forget to rate my place as five stars. It was great having you here!”
No host wants to be put in that position. But let’s assume you tried anyway…
After a few attempts you have no luck getting that nice backpacker from Australia to pay for your bathroom remodel. That means the platform provider will jump in, right? Perhaps.
Some platform providers will ask you to first make a claim through your home insurance provider (who may not be happy to hear that you’re running a short term rental business). That’s because this is typically considered an activity that needs separate coverage.
So if your home policy doesn’t cover you, it’s back to the platform provider. The next step is often that they’ll start by opening an investigation into the incident. And there’s really no way to know how long that process will take. With millions of hosts and guests out there, just think about how many customer service issues they must have to deal with everyday.
Short term rental insurance: Short term rental insurance doesn’t make getting reimbursed your responsibility. After the incident you just file a claim online (takes a few minutes), and then answer a few questions about what happened. Your insurer takes care of the rest. Easy!
Problem 2: Once your next guest checks in, it’s likely too late to report an incident with a previous guest
Scenario: You have back-to-back bookings scheduled for your property. When Guest 2 checks in they tell you that a large red wine spill on your white couch was being carefully covered by a large throw pillow. You believe they had nothing to do with it, and that the wine-spiller must have been Guest 1 the night before.
Host Guarantees: As soon as your next guest checks in, it’s probably too late to report an issue. That’s just how it usually works. Of course, if you have back-to-back bookings (and don’t notice the problem) it can be pretty tough to beat this deadline.
Short term rental insurance: If you have short term rental insurance, this isn’t an issue for you. Of course it’s in your best interest to file a claim as quickly as possible, but at least you’re not out of luck as soon as a new guest checks in. Who needs that kind of pressure?
Problem 3: You likely won’t get what your things would cost to replace. You’ll get what they’re currently worth
Scenario: Your lacrosse-loving guests were having a little practice session in the living room, and accidently put the ball through your flat screen TV. That beauty cost you $1700 when you bought it last year.
Host Guarantees: Only provide you with the “actual cash value” of your broken items. So even though you paid $1700 for that TV last year, realistically it’s probably only worth $500 currently because it’s value would have depreciated. So that’s likely the amount you’ll get back.
Short term rental insurance: With short term rental insurance you’re entitled to the actual replacement cost of accidently damaged appliances and electronics until they are two years old (up to $2500). Which is great! Unless for some reason you really wanted to replace your broken 60 inch TV with a new 20 inch TV.
Problem 4: When it comes to your liability as a property host, the default “Host Protection Insurance” that’s provided may not protect you sufficiently
Scenario: Your guest trips on your antique anvil and breaks their foot. As an aspiring tier three professional Italian soccer player, they’re now suing you for two million dollars. Yikes!
Host Guarantees: While it’s a great starting point, when it comes to policies like Airbnb’s “Host Protection Insurance” you won’t be what’s known as the “named insured” on the policy. Why might that be an issue? Well, because it can limit your rights and your coverage.
Short term rental insurance: Is true liability insurance. It’s designed to protect you specifically from lawsuits related to your coverage. Plus you’ll be covered for up to two million dollars. That should make it quite a bit easier for you to sleep at night.
So what did we learn? Relying solely on Host Guarantees can greatly increase your risk as a host. Fortunately, getting short term rental insurance is really easy and affordable.
At duuo we love Airbnb, HomeAway, CanadaStays, and all of the short term rental platforms we support. They provide an awesome service that lets hosts make a little money, while also allowing us all to see the world. But frankly, insurance just isn’t their speciality. And who could blame them?
Fortunately, at duuo we love insurance and we make it super easy! You can get coverage from duuo in about three minutes, and you only pay for the nights you have guests. At about eight dollars a night, it’s a small fraction of what you’re making for your rental. But most importantly, it’s an affordable way to not have to worry about your rental property again. CLICK BELOW TO GET YOUR QUOTE:
*Even though we like to think of ourselves as a pretty darn cool insurance company, we can’t help but suggest you check out our awesome feature-length policy description to get the full scoop on all of our terms and conditions. Makes for great bedtime reading!