Homeowners' Insurance - Help!

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Homeowners' Insurance - Help!

I have been setting up my home to rent two bedrooms through AirBnB.

 

Today I talked to my insurance company about adding any coverage that would be needed for this use, and was unpleasantly surprised to find out that if I do AirBnB, They Will Not Cover Me At All.  They assured me that since my policy had just renewed I would still be covered for almost a year, but that they would not renew me, and they would not pay claims related to AirBnB.

 

They were also unable to provide me with any suggestions of companies that Would cover my home, and so far I have not been able to turn anyone up.

I searched the user forums, and found that this appears to be a fairly common problem, and that there are numerous horror stories of people having their insurance cancelled after just -asking- about AirBnB.  A few of them appear to have lost their mortgage as a result.  The only suggestions I saw were in Australia, New Zealand, and Canada, which does not help me much in the United States.

I called AirBnB support (after considerable effort finding a phone number), and was informed by the agent that she "Never heard of that kind of a problem before". Apparently, she does not read the community forums.  The agent promised to escalate the question to her supervisor, but I have heard nothing yet.

 

Needless to say, I want to get this taken care of, since it appears that there is a reasonable chance of losing my home over it.

Any suggestions would be appreciated.

1 Best Answer
Susanne48
Level 7
Washington, DC

William,
I went thru the same scenario regarding insurance companies. I found a bed and breakfast insurance company and used them for about 6 months but it cost me almost $250 more a month than what I was paying with my home insurance. I went to an AirBnb meeting in Washington DC( my location) and expressed my concern and frustration and one of the hosts there said she has insurance thru Peers.org which is insurance for shared economy. They cover Uber, home away, And AirBNb and the cost is only $30 a month. You keep your regular home insurance. This insurance is an extension policy. I can give you more info. If you need it.

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750 Replies 750

Thank you so much for that very informative post!

This info is so helpful. I also just found out that Commerce will not cover Airbnb and my broker has recommended Vermont Mutual (700 more per year which isn't too bad) but we're still working it out - they require emergency lighting to be installed and while I"m fine with plug-in battery ones I'm waiting to find out if they require hard-wired (and I don't really want to do that in my 2 bed antique cottage..)

I will also look into Proper after reading these reviews. 

 

I cannot understand why Airbnb is silent on this issue, surely it has the clout to work with an insurance company to find a policy that will work for all of us??

(Some of my friends doing Airbnb are prepared to take a risk but I think that is playing with fire...) 

Linden2
Level 1
Ottawa, Canada

Lots of hosts like me are gettng dumped by their long-time insurance companies once they find out you are doing Airbnb stays in your home. (I was up front and informed them from the start.) 

It really is infuriating and upsetting. 

My broker here in Ottawa Canada had to shop me around to specialty commercial insurers - and the quotes were four and five times what I'm paying now. Impossibly expensive.

Through this forum I read about Square One, an insurer based in Vancouver (which has a huge Airbnb market).

I filled out their on line application and fine-tuned it with an agent on the phone. They checked with their underwriters to okay me.

I'll be paying more, but not an outrageous amount. I thought it was a fair premium. 

So, Square One understands that Airbnb covers risk from guest stays for property damage and liability and are willing to provide you with regular residential homeowner insurance, simply exempting claims associated with guest stays. A modern company. 

Hosts who don't tell their insurer that they are doing short-term rentals should be aware that their policy can by voided when they try to make a claim and the insurer finds out. You have to disclose how you use your property. Personally I want to sleep at night. 

Seems like companies are springing up in various places to serve the sharing economy. Let's find them and give them our business.

 

Hi Linden,  

Why is Canada so much more sane than the US??   I wish I could call your insurance agent but I doubt they could insure a host in VERMONT USA even though we are only 60miles from Quebec!!

Kathleen 

Kathleen,

 

I'm sure your phone would work to call Canada.  

Stephanie229
Level 3
Olympia, WA

I just went into a Farmer's Insurance office. They inquired about commercial insurance, but then looked at what Airbnb offers, and it appears they do offer - through the Host Guarantee and Host Protection Insurance, the extra coverage. I am just waiting to hear what Farmer's will determine about home insurance for personal use (as Airbnb obviously isn't the only risk involved) and an umbrella policy, given that I am operating a business out of my home. I currently have State Farm, and will see what they say as well.

 

Am I reading the Host Guarantee correctly? They say they cover property... Does anyone have a copy of the Host Protection Insurance policy? I couldn't find that one, and from what I'm reading, Airbnb is not terribly responsive about these issues (?).

 

Thank you ~ this forum was really helpful.

Stephanie, my husband talked to several insurance agents and/or companies on the Airbnb insurance policy. One problem they told my husband was that Air never did provide a policy in writing for them to review.  So we are not sure at all how that would work if you needed to cover a claim.

We eventually went with Proper Insurance, a company with Lloyds of London. They have a policy specifically for the sort of rentals we are all doing.  As my husband used to sell insurance, he said he liked what they had to offer.  And they did have something at all to offer.  The other major insurance companies turned us down as soon as we told them 'short term rental'. 

What I find really amazing is that these sorts of rentals seem more safe than long term. I mean we inspect everything in the cabin every time someone leaves.  All is clean and orderly.  Anything broken is replaced.  I would think a long term renter would be more of a risk but it's just as I see it.

Anyhow I know this does not fully answer your question, but this is what I know about the issue.

Respectfully, Kimberly

Thank you, Kimberly! I agree - I feel safer and more comfortable with short-term renters than long term! Does your husband want to start up a business? I'll be your rep in the PNW!! Sounds like there's a need for Airbnb coverage!

Thank you so much for your posts.  Your experience has been helpful in understanding this homeowners insurance situation.  I JUST started hosting this month.  My investigation so far tells me that my current homeowners insurance company will NOT cover me if I have more than two bookings per month.  This isn't going to work.  Did you go ahead and change your entire police over to Proper or did your prior homeowners just require that you have an extra rider?

@Rebecca193  I agree with you that crossing your fingers and hoping you don't end up with a guest-related claim that can be rejected by your insurer is a bad policy.

 

We went with Farmers, which allows for a "business pursuit on premises" amendment to a traditional homeowners policy. Our Farmers agent has advised us that as part of the application they sent in to Farmers' underwriting dept, he has specified we are operating a short-term rental on our property to ensure there are no suprises. He's also confirmed that Farmers is writing (and, most importantly, honoring) policies for STRs in Texas at this time.

 

Through Farmers, we were able to secure $2 million in property liability and another $2 million in personal umbrella liability coverage for less than what we were paying for our previous policy from AMICA. We also  moved our auto coverage off of AMICA and onto a Farmers policy becuase that's a stipulation of most umbrella policies.  (Umbrella liability insurance follows you wherever you go -- you could cause an accident in Barcelona and be covered if someone sues you -- whereas property insurance liability restricts coverage to your property.)  When you add the $1 million in liability coverage Airbnb supposedly extends to hosts, we're covered to the tune of $5 million.

 

Sometimes Farmers will refer you to Foremost, which is their specialty insurance arm. Foremost writes Lloyd's policies -- similar to what you will find from a lot of brokers. Most of these policies offer specialty property insurance coverage with large liability amounts of $1 or $2 million.  (The rule of thumb in liability coverage is to calcuate your net worth and get more than that in coverage.)

 

Proper Insurance is a Lloyd's "coverholder," which means they have the authoritiy to write Lloyd's policies and authorize claims payments. (Lloyd's policies tend to cover unusual or high-risk situations... oil tankers, aircraft, coastal vacation homes and the like. It's a fascinating model...you have a large group of investors, and each investor underwrites a small part of your policy so if you do have a catasrophic loss, no single entity is on the stick to cover a big payout.)

 

I spoke with Ian Smith at Proper and had a very good experience with him. Proper is different from other insurers -- even most brokers who will hook you up with a Lloyd's policy -- because Proper's policy is a General Commerical Liability Policy. This is a policy expressly designed for businesses. What that means is they cover virtually anything associated with your business. Guest hurt himself while riding one of your loaner bikes? You're covered. Guest gets drunk and shoots July 4 fireworks onto your neighbor's roof and starts a fire? Covered. You write an honest review of a bad guest and said bad guest sues you? You're covered. Homeowners and property insurance policies don't cover that kind of stuff.

 

Our Airbnb rental is in our backyard, so we're always around. That's why we were comfortable sticking to homeowners coverage with the "business pursuit on premises" amendment. But if we were renting a lake house or other place that was not within our immediate and constant control, I'd pay the extra and go with Proper. Ian's number is 1-888-631-6680.

 

Proper ended up costing around 70 percent more than Farmers. So it wasn't out of this world, and it is every different coverage. They also automatically provide for things like lost STR income if you have a fire or other disaster (remember, it's a commercial policy), whereas our policy doesn't. That's a trade-off we made by going with Farmers.

 

Hope this is helpful, and good luck!

 

Carl and Diane

 

 

 

 

@CarlandDiane0 Hugely helpful!!! Thank you so much.  I am getting right on the suggestions you and others have offered.

I tried an inquiry to Proper and got the reply that they don't insure if rooms are rented while the owner is occupying the property?? they said this could change in June. I am pursuing Vermont Mutual via my broker right now and will let you know if this goes through. I cannot understand why more insurance companies are not jumping to offer coverage, this must be a huge potential market. Why is Airbnb not leading this effort to find a partnership with an insurance company for its users???

 

I don't think crossing fingers is an option. I've cancelled all availability until I know I am covered. 

@Angela331 I agree.  Does Airbnb think that their $1million dollar coverage solves this issue?   Are hosts who own their home just not paying attention to this?  I've got a couple options I am looking at this morning.  I keep hearing Lloyds and Farmers, so I'll report back when I have more information.  It is also a state by state issue, so what works for me in VA might not be the solution for someone in another state.  

@Angela331  I just called Proper this week (Sept. 21, 2017) and was also told that they will not cover rooms rented in your home if there are any shared spaces between guests and guests or hosts and guests (kitchen, living room, bath room, etc.). If your rental rooms have totally seperate entrances then you at OK for Proper's policy ... but not for rooms in your home!

-- Lia -- Happy Hosting!

Rebecca ~ I am also about to sign on with Farmer's today. Same thing - less than I was paying at State Farm, with the STR coverage. Plus, I didn't have to explain Airbnb to my agent - he knew what we were doing and sent me a quote within  a couple of hours. Not all Farmer's agents are like that - another took days to get back to me. The underwriter is Foremost. Let me know if you need more info to relay to your local agent, and I'll see if I can help. I was really concerned about this for a few weeks!  ~ Stephanie