Property Damage and the $1M Airbnb Host Guarantee
According to Airbnb, they’re committed to creating a safe and trusted community, and understand that hosts may at times need protection. To achieve this, they’ve created the Airbnb Host Guarantee, which they claim will reimburse eligible hosts up to one million dollars for damages to possessions or property caused by Airbnb guests.
Airbnb state that your peace of mind is priceless, and that they will protect your property for every booking at no additional cost to you. They claim that the Host Guarantee represents an unmatched level of protection against damage to personal property within the travel industry.
Airbnb stipulate that there are still limitations to this protection.
In some instances there will be limited protections for things like...
In other instances, there will be no protections at all for things like...
- Possessions stored in common areas
- Personal liability
- Cash and Securities
Keep this in mind when deciding what you choose to store in your place and where you choose to store it.
The jury is still out on just how reliable the Host Guarantee actually is in providing the protections hosts are looking for when it comes to addressing property damage at their place.
In the absence of that certainty, you should also consider additional ways you’re able to protect your property. These include…
- Using your common sense
- Adding a security deposit to your listing
- Taking out additional insurance
- Installing safety and security equipment
These additional protections should represent your ‘first lines of defense’ when it comes to avoiding property damage or when trying to receive compensation. The Host Guarantee can then help you sleep easy at night knowing you have a back-up plan should all else fail.
Obtaining any payout from the Host Guarantee will be conditional on meeting strict procedural requirements (outlined shortly) for submitting a claim. Failure to meet these requirements through even minor missteps, may prevent making a successful claim. You’re therefore strongly encouraged to take a moment to familiarize yourself with the Host Guarantee now (or a time prior to needing to make a claim).
In the event that you do need to submit a claim, go to: www.airbnb.com/incidents/new. Once you select an eligible booking, here’s the form you’ll need to fill out:
The Case Against
Despite its claimed protections, the Host Guarantee is not without its critics, who say that it may not actually deliver when push comes to shove.
Critics claim that it provides a false sense of security to Airbnb hosts and that the protections afforded by the Host Guarantee are ad-hoc at best or unreliable at worst. The main criticisms are that it…
- Only provides protection for "excess coverage"
- Will be void if you fail to adhere to strict claim submission requirements
- May also be void if you fail to adhere to local laws
We’ll take a look into each of these criticisms below, and run through the things you need to know and do about each to maximize your level of protection…
Only Providing Protection for ‘Excess Coverage’
A gray area of the Host Guarantee is whether Airbnb have the ability to “pass the buck” before they’re obliged to consider a claim that’s brought before them.
The Airbnb Host Guarantee Terms and Conditions include the following two clauses:
You acknowledge and agree that any amount of Covered Losses payable to you under the Airbnb Host Guarantee will be reduced by the amounts you have already collected for the same Covered Losses from a source other than the Airbnb Host Guarantee, including without limitation: (i) amounts received under an insurance policy, guarantee or indemnity; (ii) a security deposit; or (iii) payment directly by the Responsible Guest or an Invitee, or other party or an insurer or guarantor of such party.
These Airbnb Host Guarantee Terms are not intended to constitute an offer to insure, do not constitute insurance or an insurance contract, and do not take the place of insurance obtained or obtainable by you.
Are hosts therefore expected to also possess additional insurance policies? Are hosts obliged to have first exhausted all other avenues before making a claim under the Host Guarantee? And are existing insurance policies considered primary protection, with the Airbnb Host Guarantee to be considered only excess coverage?
The answers are regrettably not entirely clear. But here is what we do know…
Airbnb have made verbal assurances that they frequently provide compensation under the Host Guarantee prior to hosts having exhausted other existing insurance policies. Despite these claims, anecdotal stories from frustrated Airbnb hosts and the opinions of insurance professionals suggest that this has not, and will not be common practice.
Whilst Airbnb may simply represent a bit of extra pocket money for you, your little home-sharing operation may, legally-speaking, be considered a commercial endeavour for the purposes of tax and the law.
Because of this, many homeowner’s insurance policies will reject claims arising from damage caused from an Airbnb booking. These policies may consider a short-term Airbnb rental to be a commercial operation that requires its own distinct commercial insurance (just like a hotel) – not homeowner’s insurance.
Despite all of this, the Host Guarantee still places an obligation on Airbnb to payout a claim – even if that requires having exhausted all other avenues of coverage first. Therefore, so long as all other means – insurance policies, security deposits, guest payments, and the like – have been exhausted, the Host Guarantee should theoretically kick in.
Failure to Adhere to Strict Claim Submission Process Requirements
The process for submitting a claim under the Host Guarantee is incredibly rigid and strict. Here is a summary of the process for submitting a claim under the Host Guarantee:
1. Contact Guest: Notify guest of complaint. Attempt to negotiate a resolution.
2. Determine Eligibility: Review Airbnb’s Host Guarantee Terms. Determine if you have an eligible claim.
Is there an eligible claim?
3. File Police Report: Filing a police report is a requirement for payment requests that exceed US$300. It is also still encouraged for all other requests too.
Police report filed?
4. Compile Documentation: Useful documentation and information (see below) will help process payment your payment request as quickly as possible.
- Proof of damages in the form of photographs or videos
- A filed police report (with report number, name of officer, and phone number)
- Receipts or some alternative evidence of the accurate fair market value or report cost. For property, provide original purchase price, date purchased, and current condition. For fixtures and furnishings, provide the estimated cost of repair or replacement. For artwork, provide original receipts or other proof of original cost
- Proof of ownership in the form of receipts, photographs, or videos
- Any other documentation that you feel will be helpful for processing your request
5. Submit Request to Airbnb: Send Host Guarantee submissions to Airbnb within 14 days from the guest’s check-out, or before the next guest checks-in – whichever is earlier.
Submitted within 14 days / before next guest checked-in?
6. Airbnb Follow-Up: Within 24 hours, Airbnb will send you a confirmation email and follow-up emails to discuss next steps (such as further documentation required).
Sent all additional documentation requested by Airbnb?
7. Airbnb Notification of Outcome: Upon receipt of sufficient information from both the host and guest, Airbnb will review all documentation, evaluate the payment request, and contact the host upon completion. The length of the process will vary depending on the severity of the case, the quality of the documentation, and the cooperation of the host and guest. Airbnb strive to resolve most cases within a week of submission.
As you can see, making a claim is no walk in the park. Airbnb oblige you to have performed specific (often complicated and time-consuming) actions within onerous timeframes to be able to claim under the Host Guarantee.
As an example, is it feasible to have a tradesman come in and provide an estimated cost of repair or obtain a police report before your next guest check-in (which may be that same day or tomorrow)? To be eligible to make a claim under the Host Guarantee, an Airbnb host would have needed to have done that!
If making a claim under the Host Guarantee, become familiar with all requirements of the policy to ensure that your claim is not denied simply on procedural grounds. The best way of doing this is understanding these requirements before a time you need to rely on them.
Failure to Adhere to Local Laws
It’s no secret that many people are technically operating their Airbnb listings in contravention to local laws. These are often relatively minor contraventions, be they the number of days their place is rented out each year, through to a failure to collect local taxes.
Be mindful that if operating your Airbnb in violation of any zoning or other local laws, Airbnb may reserve the right to deny a claim under the Host Guarantee.