Should you rely on the Airbnb Host Guarantee?
Many hosts rely on Airbnb’s well-advertised $1USD million of free Host Guarantee cover. But be warned, this can lull you into a false sense of security leaving many disappointed when they make a claim but find they don’t tick the boxes.
The rules are specific, which can make it hard to claim especially when innocent hosts unknowingly violate the conditions.
Key takeaways
- Airbnb’s Host Guarantee (now part of AirCover for Hosts) is not a replacement for a comprehensive insurance policy.
- AirCover has conditions, exclusions and claim requirements that may limit when it responds.
- A dedicated insurance policy can provide protection whether or not you have paying guests staying at your property.
- If you rent your home or holiday home to short-term guests, it’s important to choose insurance that’s designed for that type of use.
- Always check that your insurance provider knows you’re hosting paying guests, as this can affect your cover.
What does it cover?
The Airbnb Host Guarantee isn’t a formal insurance policy, but rather a strongly-worded promise to rectify guest damage providing your situation meets certain conditions. Airbnb AirCover is designed to complement your insurance, not replace it. If you’re hosting paying guests, it’s important to have insurance that’s designed for the way your property is used.
It isn’t regulated by the New Zealand Financial Markets Authority, so you would struggle to take them to court locally if things really turn sour.
Last Resort for Recovery
In Airbnb’s own words they say the Host Guarantee is not an insurance policy, and shouldn’t be considered a replacement.
Firstly, the guarantee can only be claimed on after trying to recover compensation from the guest, and then your own insurance (if you have this). Already the Host Guarantee is a last resort.
For a chance of recovery from the guarantee, you’re going to have to prove you persistently chased up that festival-goer to get $800 back for a living room wall repair.
There are many examples of people angry about their payout from the guarantee. Usually it’s because they aren’t aware of the conditions.
A main stump is that damage needs to be inspected, reported and lodged to Airbnb within 14 days, or else you’re out of luck.
By the time you’ve checked in your next guest it could already be too late. This could be enough to kill any claim through the Guarantee if you live away from your Airbnb.
Remember that you need to seek recover from the guest, and then your insurance before you lodge a claim in the 14 day window. The requirements almost seem like a trap to get you to exceed the strict 14-day deadline.
Watch out for Exclusions
- Only damage that happens during the booking period is covered. If an unwelcome guest overstays their welcome and causes damage, there won’t be cover.
- Cover only applies to part of the house that’s in your listing. If you rent a room, but your guest uses another bathroom and causes damage, you’ll need to foot the plumber’s bill yourself.
- It’s full of various exclusions; like damage from excessive water utility use (a sink overflow won’t be covered), and any damage by animals or pets (are you sure your guests won’t bring their dog?).
- Be prepared for stacks of bureaucracy when you make a claim. Airbnb require extensive police reports, proof of ownership and request form documents for damage.
The list of exclusions goes on. To read the full terms, conditions and exclusions see here.
No Liability Insurance
Finally, the Host Guarantee doesn’t help when it comes to legal liability. If your guest suffers an injury and they sue you, the Host Guarantee will fall seriously short.
The idea of someone stubbing their toe on the coffee table and suing might seem ridiculous, but legal liability also extends to things like sickness (if an illness is caused by the condition of your house) or freak accidents.
Is it worth the Risk?
One-in-seven Kiwi Airbnb hosts report damage. That’s about a 15% chance you’ll suffer damage one-day.
While most reports are minor and hosts voluntarily pay to avoid the lengthy resolution process, we’ve heard some shocking stories ranging from vomit-covered walls to 100-person guest parties.
Hosts should ask themselves if relying on the Guarantee is worth the risk? After all, Airbnb themselves recommend having robust insurance in place in the first instance.
Learn more today about our specialist short-term guest cover.
Initio Insurance is a New Zealand online insurance provider offering house insurance for owner-occupied homes and holiday homes that are also rented through Airbnb.
Frequently asked questions
Why do I still need insurance if Airbnb offers AirCover?
A dedicated insurance policy can provide ongoing protection for your property, whether or not guests are staying, while AirCover is intended as an additional protection programme with specific terms and limitations.
What type of insurance do I need if I host paying guests?
That depends on how you use your property. If you occasionally rent out your own home or holiday home to short-term guests, we offer policies designed for those situations. If your property operates as a commercial accommodation business, you’ll generally need commercial insurance.
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