Airbnb insurance: What’s the difference between a “Host Guarantee” and short-term rental insurance?

By Rachel Devitt on November 30, 2020
Estimated reading time: 4 minutes

Your rental property should make you money. And it will with Airbnb insurance coverage, if you choose the right provider.

Mom reading on the couch while the daughter is fixing a snack in the kitchen of their Airbnb rental

Photo by cottonbro from Pexels

So, you’ve finally purchased that second property and you can’t wait to start renting it out. As you fluff the pillows and iron the curtains, it might be a good idea to start thinking about how you want to keep your property protected as you start to invite other into it. When listing a property on a home-rental website, like Airbnb, you’ll notice that you’re covered under something called a “Host Guarantee.” This guarantee is designed to alleviate some of the stress that comes with renting out your personal property, offering protection in the event that something gets damaged or destroyed during the rental period. Sounds easy right? Let’s take a closer look.

Is your home listing with Airbnb insured?

If you look at the terms and conditions of the Host Guarantee, Airbnb states that this guarantee does not cover you for everything that may happen during the time you’re renting out your property. In fact, it acknowledges that this “guarantee” is not an insurance policy and encourages renters to purchase an insurance policy to cover any loss that is not within the terms.

Host Guarantee isn’t exactly Airbnb insurance

Still not sold on the idea of an extra insurance policy for your Airbnb property? Here are some additional reasons to purchase a short-term rental policy as you prepare to rent out your space.

Actual replacement cost vs. actual cash value

If something you own has been damaged as a result of guests staying in your home, Airbnb’s Host Guarantee will replace the item or provide compensation for the actual cash value of the item. What does that mean exactly? Let’s say you purchased a new sofa last year for $2,000 and an Airbnb guest accidentally breaks the leg. The actual cash value of the sofa would have depreciated significantly over time, meaning you wouldn’t receive the $2,000 you paid for the sofa, but just a small percentage of that sum. That said, a short-term rental insurance policy assesses items based on the actual replacement cost (as opposed to its cash value), so if you were to file a claim on your ruined couch, you’d get $2,000 back in full to replace it.

The time to file

Another scenario? A guest created a huge mess in your home—we’re talking damaged walls, carpet stains, broken furniture, the works. You have another guest arriving the next day, so you spend your entire afternoon cleaning it up for your next guests, as you’re booked solid through the week. One issue that arises in the Airbnb Host Guarantee is the fact that if another guest checks in, you probably will not be able to file a claim for the damage your first guest caused. This can be a major issue for popular listings that experience back-to-back bookings. With short-term rental insurance, you’re still covered after your initial guests check out. While you want to make sure you file a claim as soon as possible, additional bookings won’t get in the way of your coverage.

Making the first move

After a guest has damaged your home, you’re probably not going to be in the mood to chat with them more about it. Unfortunately, the Airbnb Host Guarantee only comes into effect after you’ve made attempts to get in touch with the guest to ask them to repay you for the costs of the damage, enduring what can only be considered an awkward conversation. Likely, your discussion will not end with you receiving the $5,000 needed to replace the ruined hardwood. It’s only then can you file a claim through Airbnb’s Host Guarantee. Save yourself the hassle! Short-term rental insurance will cover the costs of the damage done to your property, without you having to contact the guests who put you in this mess in the first place. While Airbnb’s Host Guarantee is a step in the right direction, there’s nothing that compares to insurance designed specifically for short-term renters. For on-demand coverage that you can easily purchase online, check out Duuo. For about $7 a day, these short-term rental policies keep you covered in the event anything goes wrong while you rent out your space, and the policies are affordable and easy to factor into your overall budget.