When you hand the keys to a guest that rented from you on AirBnB and similar sites, will you have the right insurance coverage?

AirBnB has become a global powerhouse with over 800,000 listings, and about 12% of those booked at any given time.  In New York city, alone, Airbnb has increased the number of short term rentals in apartments and condos, from 2,652 in 2010 to 16,483 in the first half of 2014.  16 million guests rented via AirBnB in 2014 as opposed to staying at traditional hotels and Inns. It's called a “disruptive” company because it disrupts the traditional ways of doing business.  But what about guests that might be disruptive in a room you rent out, and what happens when an accident occurs?

Here's what you need to know:

• AirBnB does provide what it calls “Host Protection Insurance” of up to $1 million per incident in the USA.  It's not enough.
• Did we say it's not enough?  Yes. It's secondary coverage which means that AirBnB expects you to push through claims to your regular homeowners insurance first.
• Does regular homeowners insurance cover “commercial activity in your home”?  No.  An astute New York Times reporter found that out by writing to insurance companies directly and asking them.
• Oregon's insurance commissioner had this to say to Airbnb hosts in a September consumer advisory statement: “Homeowner policies generally do not provide coverage for business use.”

The bottom line for AirBnB and liability, whether you live in Oregon or Washington, is what the Oregon insurance commissioner goes on to say:  “Find out whether you can add to your coverage, or whether you have to buy a policy specifically designed for a landlord.”

You need to have the right policy in place, because AirBnB's coverage is not “primary coverage.”  Read your current policy carefully, if you intend to rent space via a company like AirBnB.  Then review insurance options and read that policy carefully… including all the small print.  Get the best policy that covers you for commercial rentals in your home.