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Insurance And Airbnb: How Does It Work?


In fall 2007, San Francisco, CA residents Brian Chesky and Joe Gebbia developed an innovative way to help pay rent: they transformed the loft in their apartment into a studio with three air mattresses and, after designing a simple website, soon had three renters paying $80 each. Not long after, Brian and Joe welcomed friend and former roommate, Nathan Blecharczyk, to join their entrepreneurial adventure.

When the Democratic National Convention came to San Fran in summer 2008, the city was short on hotel rooms - and the trio jumped on the opportunity to launch their company, Airbed & Breakfast. Brian, Joe, and Nathan used hand-made, customized “campaign” cereal boxes to raise more than $30,000 for the company. They raised another $20,000 in funding after joining the Y Combinator’s 2009 winter class, and formally changed the company’s name to Airbnb.

Today, Airbnb is a multibillion dollar company with more than 60 million guests in over 34,000 cities, across 190 countries.

Growing Liability Concerns

Like all start-up companies, Airbnb had it’s fair share of growing pains. One of the most significant, however, was in the summer of 2011, when a host came home to find her house completely wrecked and all of her valuables stolen. This foreshadowed what would quickly become a significant issue for both the hosts and the company. Eventually Airbnb announced a $50,000 guarantee to hosts who experience any damages done to their homes.

Even with Airbnb’s promise to cover property damage, experts say that being a host on the sight is simply too risky without reliable insurance coverage for both you - the host- and your guests.

“Secondary” Liability Coverage

What Airbnb neglects to advertise is the fact that their liability insurance coverage is “secondary” coverage, meaning you must first submit any property damage or liability claims through your personal insurance company before Airbnb will provide coverage. It’s here - in this gray area between insurance companies and submitting claims - that can cause you the most confusion, frustration, and even harm.

Because homeowners policies don’t typically provide coverage for business use, you’re technically required to inform your insurance agency if you are running a business-like venture out of your home. Neglecting to be forthcoming about this information could not only impact your coverage and threaten the continuation of your policy, but it could also put you at risk of committing soft insurance fraud.

3 Ways to Cover Your Airbnb Business with the Proper Insurance

Thankfully, you have several options when it comes to having worry-free insurance for you, your home and your guests.

  1. Be straight with your insurance company and inform them that you are interested in getting involved in the hosteling business. Not only is this what experts at Airbnb recommend you to do, but it’s also the best option when keeping your current insurance policy. Some agencies, like Allstate, allow you to rent out your home or a room in your home for up to two weeks while also providing liability insurance for anyone staying under your roof. Other agencies provide limited-time liability coverage for hosts who sparingly use Airbnb. Others still allow you to maintain your original policy as long as your rental income doesn't exceed $15,000.

  1. For around $3,000 per year, you can purchase a separate vacation home-rental or landlord policy. These policies include:

  • replacement cost coverage for both your home and any contents that might have been taken via theft

  • coverage for damages done to your building or belongings caused by guests

  • coverage for actual loss of income

  • commercial liability coverage if a guest is injured or dies

  • commercial liability coverage for your amenities


  1. You can trust that Airbnb’s coverage will provide as promised.

At Best Insurance Services, we can help you determine exactly what you need to have protect yourself, your home, and your guests. We promise to find you a home insurance policy that is tailored to fit your wants and needs no matter if you rent or own. As the leading home insurance company in Moreno Valley, CA, Best Insurance Services can provide you with affordable, endless policy plans that will best benefit you. Call us today to learn more.