If you’re thinking about turning your Atlanta home into an Airbnb, you’d be in good company. Tons of people in the U.S. alone have decided to start earning fairly easy money by renting out their homes to travelers. However, many Airbnb hosts start their experience without truly knowing the risks. So, how can you protect yourself as an Airbnb host? How do you insure an Airbnb? Let’s take a look.
Will my home insurance cover me as an Airbnb host?
A typical Atlanta home insurance policy is only built to handle everyday risks, such as visitors getting hurt or disaster perils. Even if your policy does allow you to have temporary tenants, insuring any space in your home as an Airbnb will be a bit different because of the sheer volume and variety of visitors you’ll have.
This means that you’ll need to insure the Airbnb as a type of commercial rental property. However, that doesn’t necessarily mean you’ll need as high of a coverage limit or premium payment as an apartment complex. In fact, there are a few ways to go about insuring your home as an Airbnb. Each way, though, will depend on how much of your home is being rented out and how often you plan on listing the location.
Host Protection & Host Guarantee vs. Insurance for your Airbnb
It’s important to note that Airbnb does offer host protection and host guarantee plans per guest booking. These plans can cover up to $1 million in general liability claims and property damage to your home.
However, Airbnb specifically states that these plans DO NOT take the place of insurance. In fact, there are tons of conditions and exclusions that must be fulfilled for Airbnb before a host can be compensated using the guarantee. One of the conditions even suggests that the host would have to file a claim with their own insurance first before the guarantee would apply.
At any rate, it’s usually better all around to talk to your insurance agent first so you can get the coverage you need and not depend solely on the host guarantee.
How can I get insurance for an Airbnb?
The type and cost of commercial property insurance you’ll need for your Airbnb will mainly depend on your house’s primary use.
- If you still live in the home and are renting out a few rooms: Some carriers may require you to add an endorsement that lets them cover the risk of increased occupancy.
- If you’re using the property solely as an Airbnb: You’ll probably need a separate commercial rental property policy. Remember, though, that insuring a single house or rental unit usually isn’t as expensive as insuring an entire apartment building, even if you rotate guests on a regular basis.
How much insurance do I need for an Airbnb?
Most carriers will require you to insure your house’s structure at its replacement cost value (RCV) if you have a mortgage. If you don’t have a mortgage, you can choose to insure the structure for its Actual Cash Value (ACV.) Insuring your house for its ACV, though, might mean that you won’t have enough funds to properly rebuild your home if there was a total loss.
When insuring personal belongings or decorations inside of your home/Airbnb, your carrier may let you choose how high your property damage coverage limit is. This is why it’s vital to take a home inventory so that you know which belongings are in which rooms and the condition that they were in previously if something happens to them.
Also, keep your deductible in mind if you do want to file a claim in the future. If the damages to your home or property are less than your deductible, then your home insurance may not be able to help anyway. In any case, check with your agent about your insurance requirements, what your policy already covers, and how high of a coverage limit you’ll need to choose to properly protect your home.
What will an agent need to know to get a quote for Airbnb insurance?
An Airbnb will face more risks than a typical owner-occupied house. So, there are specific details that your insurance agent may need to know when signing up for insurance or adding coverage to your policy. These are some of the questions you should be prepared to answer when insuring your Airbnb:
- Is the property deeded in your name or under a business organization?
- How many units are you renting out in the home?
- How long will each guest be staying on average? What is the minimum amount of time a guest will stay?
- What is your address?
- What is the square footage of the home?
- How many bathrooms are in the home?
- What kind of finishes are in your house? (i.e. custom, builder-grade, etc.)
- If the home is over 40 years old, have the plumbing, electrical, and A/C systems been updated? When?
- How old is the roof?
- What deductible would you like?
- How much personal property coverage would you like?
Local laws and regulations.
As Airbnb and other sharing services grow, more and more city governments are regulating their practices. Some cities and towns may require specific notice or permits when running a short-term rental. Other towns may not allow Airbnbs at all. So, check your local laws on short-term rentals before setting up your home as an Airbnb.
Overall, Airbnb can be a great way to earn money and open up your home for travelers to experience more of your city. As a homeowner, though, it’s important to keep your house, as your investment, safe. While Airbnb’s host protection and guarantee plans may offer extra protection, it’s important to have the right insurance for your short-term rental so that any hosting-related claims aren’t denied when you need it most.
Our experts can help you find affordable rates on Atlanta home insurance whether you need a typical owner-occupant policy or you need to add specific coverages. LiveChat with us, fill out our online form, or give us a call today to stop missing out on great home insurance coverage for the rates you deserve.