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Is Homeowner’s Insurance Enough if You Have Airbnb Guests Coming In?

Homeowners purchase homeowner’s insurance as a term in their mortgage contract. The insurance protects the dwelling against covered events and provides funds to pay for repairs or replace the property. If the property owner wants to operate a small business at home, the insurance may provide coverage for limited liabilities. However, homeowner’s insurance may not be enough for a property owner that wants to operate an Airbnb at their home. 

Understanding Homeowners Insurance

Homeowner’s insurance applies to a residential property in which the owner lives, and it is not the same as commercial property insurance. While the homeowner’s insurance will provide coverage for the dwelling, personal belongings, and certain liabilities. It will not present adequate coverage for a business, and a homeowner who wants to operate an Airbnb in their home won’t get the same level of coverage for guests as they would a friend or family member. 

Once they choose to operate a business inside their home, the property owner could face more serious liabilities. The homeowner’s insurance coverage provides liability coverage, but it is designed to manage accidents such as dog bites, slip and fall accidents, and protection for certain service providers who complete services.

If a guest stays in the property as a client of Airbnb, they could file a legal claim against the company and not the homeowner. Homeowners can review more about homeowner’s insurance and limitations by contacting Roger Butler Insurance now. 

General Liability Insurance Requirements

By operating a business from home, the homeowner will need more extensive liability coverage. If a guest becomes injured while paying for a service, they can sue the company. When suing a company, different rules and laws apply.

It’s not the same as a visitor coming to see the homeowner with permission, and they are staying for a limited amount of time. The victim wouldn’t sue the homeowner for injuries that happened at a business. General liability covers premises liabilities related to operating a business, and this coverage could protect the property owners against serious financial losses. 

Property Damage Caused by a Guests

The homeowner couldn’t get coverage for property damage caused by an Airbnb guest through homeowner’s insurance. The homeowner’s insurance policies have strict limitations. The property damage must happen because of a covered event. This means that a fire, natural disaster, or criminal act must cause the damage. 

The property owner will have to start a commercial property insurance policy since they are using their home as a business. The policies provide coverage for property damage caused by clients. An Airbnb could sustain property damage because of guests and reckless actions. If the property owner doesn’t get the insurance policy, they will have to pay for the property damage out of pocket. 

Host Protection Insurance

Host protection insurance provides liability coverage and protection for property damage. The value of the policy defines how much coverage the homeowner gets from the policy. The total number of guests they allow into the home may play a role in how much coverage they need. 

Homeowners who want to operate an Airbnb from their home need additional insurance policies beyond their homeowner’s insurance. The homeowner’s insurance will not provide coverage for property damage caused by guests, and the liability coverage is not high enough for a variety of guests staying at the home. Since it is a business, the homeowner must get more policies to protect their home and themselves against serious liabilities.

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