Florida is one of the top destinations sought by customers of Airbnb, VRBO and other home-sharing, short-term rental hubs – especially around the holidays, where people are seeking a warm respite from the northern cold.
But when injuries occur on these properties as a result of dangerous conditions, the issue of liability can be complex.
Generally, traditional hotels and properties overseen by rental management firms are covered under commercial liability insurance policies that provide for coverage if someone is killed or seriously injured on site. Additionally, private homeowners often carry their own insurance policies to cover injuries suffered by social guests. However, when a private homeowner is renting out a property for commercial gain, injuries sustained by commercial guests may not be covered under a homeowners’ private policy.
Our Boca Raton injury attorneys understand this created a growing concern among both Airbnb users and guests, prompting the company to announce it would provide up to $1 million in liability coverage free to hosts who are sued for premises liability injury or death. The new initiative will be effective in the U.S. beginning Jan. 15, 2015.
Previously, the company had announced up to $1 million in host guarantee, which covered things like fires or damage to the property. The new host protection program is different. It offers coverage to hosts who are sued for premises liability resulting from injuries sustained by renters.
This may seem a great deal – it’s offered free, after all – but it’s not as straightforward as it seems on the surface. Firstly, Airbnb’s insurance coverage is secondary. That means it requires homeowners to initially seek coverage from their own personal homeowners’ or renters’ insurance before knocking on their door.
In some cases, private homeowners’ insurance policies will provide some coverage under certain circumstances. For example, Allstate allows exceptions to people who rent their property for a week or two, allowing their liability coverage to remain for those guests. USAA said it will sometimes grant exceptions to those who “very occasionally rent out a room,” as opposed to making the process into a veritable business and source of regular income. Insurer Chubb will grant coverage for premises liability as long as the property owner isn’t raking in more than $15,000 annually in rental income.
But these claims are handled on a case-by-case basis, and renters are generally not apprised of the applicable policy beforehand.
What’s more, Airbnb’s host protection program has significant exceptions. It will not cover claims for injuries resulting from defects in the property or intentional infliction of injury by hosts. The latter is an uncommon scenario, but injuries resulting from property defects is problematic because many premises liability injury claims are predicated on the fact the site was somehow hazardous or inherently defective.
The company does not have a great track record when it comes to reimbursement. So far with the host guarantee initiative, there have been 1,700 reports of property damage in the 6 million U.S. stays recorded. That’s relatively low, but of those 1,700 claims, only 40 percent were paid out.
The bottom line is property owners may want to check with their own insurer before moving forward with short-term rentals. If you only rent your property out on rare occasion, you may be fine to stick with the base coverage. However, if home rental becomes part of your regular income, you may need to purchase additional coverage, or else find yourself personally responsible to cover tens of thousands of dollars in medical bills, lost wages and other expenses related to an injury on your property.
Renters, too, may consider securing their own travelers’ insurance, making sure it contains coverage for injuries.
Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights.
Airbnb will cover guests’ accident costs, Nov. 20, 2014, Engadget.com
More Blog Entries:
Trip-and-Fall Claims Require Actual or Constructive Knowledge, Oct. 20, 2014, Boca Raton Injury Lawyer Blog