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

@ Emily -- I am in SoCal (Pasadena near LA) ... I feel your pain and am sorry to read you've had such problems ... I'm reseraching this insurance issue and will let you know if I find a solution...

-- Lia -- Happy Hosting!
David126
Level 10
Como, CO

I am not familiar with California Insurance Law, but unless there is something different to general Insurance principles I think you will have a challenge on your hands and Lawyers do not work cheap.

 

Some Homeowners Insurers will it seems cover incidental rental activity but they seem to be a minority. 

 

I can see a number of reasons why AirBnB would not want to get involved:

 

  1. I assume many Host would not be in the business if they understood the risks they were running, had to pay for Insurance cover that covered rental operations.
  2. The market changes so keeping up to date would be an issue.
  3. You seem to focus on the US and this is a worldwide issue.
  4. There are many many different types of Listings on AirBnB so no easy answer.
  5. The only Insurance AirBnB provide is limited liability cover, not seen anybody claim on it and report back so a bit of an unknown. The Host Guarantee, well that has had a lot of comments.

Just a thought but I assume there are B&B Associations in CA and they no doubt have recommendations for Insurers/Brokers.

 

 

David
Wendy-and-Frank0
Level 10
Stonington, CT

State Farm or Allstate (I forget which) will give you a rider for just the days you have someone at your place.

It's Allstate HostAdvantage.

@James379  I am just up the freeway from you so if you can get this from Allstate you would think I could, too. However, I have spoken with 4 Allstate agents here in Pasadena and asked for the HostAdvantage. I was told that it is not offered in California ... Do you have it?

I have talked to Proper and CBIZ and they will not offer a policy if you share spaces in your home.

Slice offers an add-on by the night (at $9.25 per) which is not a replacement for your homeowners insurance

I still have the problem that my State Farm agent said that if I rent more than 180 nights per year my homeowners insurance will be void/nullified.... I really don't see a good solution for those of us renting rooms in our homes ... true home sharing.

-- Lia -- Happy Hosting!

Hi Lia and Garry, 

Are you saying that Allstate will cover you with their home insurance and their Host Advantage add-on if you rent rooms in your home while you are there and do it for less than 180 nights a year.  That would work for me.  

This assumes Allstate has rolled out the Host Advantage add-on in Vermont.   

 

I had been holding out for Proper, who was waiting for Lloyds to approve that form of insurance but I guess it never came through.  

 

Kathleen 

Thanks, Lia, for your response.  I just found out about Allstate's HostAdvantage and was going to call them today.  Proper and CBIZ told me the same thing as they told you.  I'm doing more research today and will post my findings.  Airbnb said that they cannot recommend me any ins. providers.

 

James

@James379-- Yes, as two of probably many more SoCal hosts, let's do keep each other posted.  I do have an agent here in Pasadena who thinks he has found me a package that includes homeowners + short-term rental and can also have earthquake and liability added on.  But everytime I talk to this agent I ask him to verify that the rental portion covers shared spaces within my home ... he says he will get back to me with an answere, but so far no answer.....

-- Lia -- Happy Hosting!

Lia, today, Allstate gave me the same answer they gave you.

 

James

E-and-J0
Level 2
Morgantown, WV

 I found out that my insurance company is dropping me and In 45 days, I will no longer have a homeowners policy . 

 I've had an umbrella policy with this company for over 40 years. 

 I find it unreasonable that Airbnb has not found a company that will provide homeowner's insurance to its hosts. 

 My  frustration level is at an all-time high. I can understand why people are no longer listing on Airbnb for this very reason. Has anyone found a good company?

From what I'm reading here, it seems that there are too many variables. There doesn't seem to be a company with the same set of answers for every client.

Edie

 

I am sure there are many B&B's in every State in the US and therefore a developed Insurance market for such listings.

David

@David126A true B&B is not viewed the same as renting rooms in your home through Airbnb ... there is different licensing and commercial requirements and the insurance companies I've talked with do not see these two as equal ... It would be nice if there was a hybred policy for homeowners that covered your home and your business. ... I'm searching for this and will post if I find something ... It is amazing that with all the rooms rented through Airbnb that insurance does not exist!

-- Lia -- Happy Hosting!

Hi, Edie.
I believe every state is different with their laws, and I think that's why, for example, my insurance agent can't just insure others on here from other states. I also found that even with Farmer's, the company I went with, different agents had different answers. I emailed some folks in my city and asked who they used, and that's how I found my agent. That's my suggestion. And if they also don't have insurance, then split up the call list. Or maybe calling the underwriting company - like Lloyds or Foremost or others mentioned here, and asking them which agents they work with in your town for Airbnb rentals?  Just some ideas... I was told my insurance would not cover me as well, and pre-empted the letter with finding a new agent. I realize that's not so easy for some others, however. Wishing you the right connections!!

 

I posted earlier with the wording my agent used for the plan he found for me. If you don't find that, email me and I'll look for it. My agent used Foremost as the underwriter.

 

Stephanie

@E-and-J0, what you describe sounds familiar. AMICA declined to renew us for similar reasons. Many insurers simply aren't equipped -- or just aren't willing -- to take on the added risk of multiple short-term guests who would be more likely to file a claim should a mishap occur. So we've just gone through the hunt, and here's what we learned.

 

Airbnb claims to offer $1 million in liability coverage for all hosts, and your premiums are covered as part of the host fees they take with each booking. If there's a claim and Airbnb pays, great. I'm not willing to bet my retiremment on it, though. 

 

Our local Farmers agent wrote us a policy through Farmers, and added a "business use" provision for our casita and stipulated it's a short-term rental. We got $2 million in property liabilty and another $2 million in umbrella coverage. (As you know, umbrella policies follow your automobiles, so we had to move our auto insurance to Farmers.) The good news is that for the cost of what we were paying for $300K personal liability and standard auto coverage through AMICA Insurance, we were able to get many times more liability coverage from Farmers -- and with eyes-wide-open coverage of our Airbnb space.

 

Farmers operates a specialty insurance company called Foremost Insurance. They can set you up with a Lloyd's policy, which is a special kind of insurance designed to cover unusual properties. Some Airbnb folks insist that you aren't truly covered unless you have a Lloyd's policy.  http://www.foremost.com/

 

We also got a quote from a local broker who writes a lot of STR policies. He quoted us an expensive Llloyd's policy combined with traditional auto insurance. There may be someone in your area who has experience working with short-term and vacation rental folks (I'd Google areas in your state where there are lots of vacation rentals -- resort areas, etc. -- and look for brokers in those areas. Then dial a couple and ask if they have experience finding coverage for STRs. You'll probably end up wiht a Lloyd's policy.)

 

Finally, we also got a quote from Proper Insurance, which specializes in vacation and STR insurance. They will write you a $1 million General Commercial Liability Policy -- it too is a Lloyd's policy though in Proper's case it is essentially a business insurance policy. If your Airbnb property is also on your home property, Proper will need to include your main house in the coverage. The difference with Proper is that they really treat it as business insurance: If anything your guest does causes a loss in your neighborhood (their dog bites someone, or they shoot off fireworks and set your neighbor's house on fire), you're covered. Same goes if your guest borrows one of your loaner bikes and hurts himself. You're covered. This is generally NOT true with traditional policies, where the coverage stops at your property line. Finally, they include loss of income insurance of up to 6 months if you have a major loss (incident, flood, etc.) and have to go several months without the income you would have received from your Airbnb rental.  We worked with an excellent guy there named Ian Smith. If I ever get the sense Farmers will not properly honor our STR claims, I'll probably go with Proper. https://www.proper.insure/

 

Hope this helps! And don't stress -- there are options out there, and you'll find one.

 

Carl and Diane

 

 

 

 

Thanks so much for all the info. I will follow up on all of that. In the meantime, I spoke with Prosper today, but they said they would not cover us if we were in the home when guests stayed. They were ok with "entire stays" but definitely not private rooms. 

 

We are actually thinking of giving up our rooms and just renting our newly remodeled apartment. We haven't totally given up yet. Thanks again for the response!

 

edie