Limitations of the Airbnb Host Guarantee

22/07/2019

One of the big questions we get asked when discussing our insurance products with prospective customers is ‘but won’t the Airbnb Guarantee cover me for that?’. In most cases the answer is ‘maybe’ and sometimes the answer is just a straight-up ‘no’, but at no point is the answer ‘yes, definitely, the guarantee would cover you for that’. The Airbnb Guarantee is not an insurance product and to Airbnb’s credit, they do state that fairly clearly on the info page for the guarantee. Despite this, when we asked 1,000 potential hosts and guests if Airbnb provides insurance for damage to people's homes, a massive 47.5% of them said yes, which of course is not the case. For the most part, this is down to a simple misunderstanding of what it is that Airbnb has on offer - the guarantee can be misinterpreted as an all-singing, all-dancing, free of charge solution to all your problems if you don’t take the time to fully understand it. 

That being said, an argument can also be made that even those with a comprehensive understanding of the guarantee won’t always get what’s advertised if they have to make a claim. This is because Airbnb isn’t legally obligated to cover claims just because the rules have been followed. All claims are at Airbnb’s discretion and there are numerous loopholes which could mean that your claim won’t be paid. So what ARE the rules with the Airbnb Guarantee? Well, I think it’s fair to say that no one really knows, but we’re going to do something that seems even more impossible than the discovery of bigfoot, and try to highlight the key points as best we can!

The 1 Million Dollar Promise

First off, for us UK residents, this $1,000,000 USD worth of protection that sounds so impressive actually converts to around £600,000 GBP, which sounds A LOT less impressive. Especially when you consider (and this is the real kicker) that the cover amount is actually the total protection limit for all guests, at any one time, worldwide. This means that you’re sharing that $1,000,000 with all of the other thousands of hosts, all over the world. The likelihood is that there isn't enough money in the pot to actually cover multiple large claims, and even if just 1 large claim is dealt with, the remaining amount might be so small that a substantial amount of the smaller claims might not be able to be dealt with properly and if the limit is reached, then I’m afraid you’re out of luck! To give you an example, for our worst claim to date we paid out £100,000. It won’t take many of those worldwide to leave nothing in the pot for you.

Dollars

Keys and Communal Areas

Whilst Airbnb can offer some level of protection inside the walls of your home, as soon as you step out of those walls, you’re completely unprotected. This might not seem like a big deal for those who let out their houses, but for those that let out flats, you’re going to be massively under-protected. If, for example, your guest decides to have a party in your flat after you clearly stated that they were not allowed, and as a result, the landing outside your flat was trashed as well as the flat itself, you’ll have to cover the cost of the damages to the landing area yourself. 

If it’s outside of your flat walls, according to the Airbnb Guarantee, it’s not Airbnb’s problem, even to the extent of not covering keys if they’re misplaced outside of the home. The more guests you have in your home, the higher the likelihood of your keys going missing from time to time. If this happens, because they’ve been taken outside the home in order for them to be ‘misplaced’ and because the lock that will need changing is technically on the outside of the flat, you’ll have to foot the bill for getting locks changed and new keys cut yourself. There are ways around this, of course - you could get an automated locking system added to your door, which allows you to manage who can and cannot enter the property from anywhere in the world via an app on your smartphone, all without the need for a physical key. This could be a potentially ideal solution for those worried about losing keys, but it’s worth bearing in mind the insurance implications of using this kind of kit. Automated locking solutions require you NOT to deadlock your door, so if the system fails and your place is broken into, you would not be covered even if you did have actual insurance on top of the Airbnb Host Guarantee. 

For those of you who want to look into alternatives for key handling, you should check out some of our partners and see if there is a solution that fits you best:

  • Klevio have created an automated locking system that allows you to lock and unlock your front door from anywhere in the world as long as your phone is connected to the internet. You can set times of the day that your guests can access your home, which is great for preventing early check in’s, revoke access if the guest breaks any house rules that mean they have to leave the property and talk to people at your door if they’re having any trouble accessing the property at any time. Prices for this kind of kit start at £449, and go up to £649 depending on whether your property is a house or a flat and if you want the WiFi and 4g version or just the WiFi version, and any other bells and whistles added. There is also a £5 per month subscription fee to get full use of the mobile application.
  • KeyNest allows you to leave the picking up and dropping off of your keys to a team of verified staff at locations all over the world. It takes 30 seconds to register with them and then all you need to do is drop the keys off at your local KeyNext store where a tracking fob will be attached and the keys will be safely stored either within the store or in an automatic locker. Once you’re set, you can share your key location and a single-use, 6-digit collection code with your guests which they use to collect the keys and at the end of the stay they just need to return them back to the store. You’ll be notified every time your keys are collected and returned, and if you’re expecting them to be returned at a certain time and they’re not, you’ll be able to find out where they are and if necessary, contact the KeyNext team who are available 24/7 to support you. KeyNest are also the  GUARDHOG insurance approved key exchange solution at this time, so if your keys do go missing, you’ll have us to fall back on to get them, and your locks replaced.

Keys

The Claim Windows

For your claim to even be looked at in relation to the Airbnb Guarantee, you must submit it no later than 14 days after the stay it is related to has ended. During this time, you also have to have fully exhausted all potential resolutions between yourself and the guest privately. This may not seem like too much of an issue for some, but there are multiple scenarios that mean hosts miss the opportunity to take advantage of the guarantee, for example: if you’re out of the country for a prolonged time and don’t discover the loss until you return, if you haven't yet exhausted all possible resolutions with the guest privately even though it looks like you’re not going to get anywhere or if you just have a busy lifestyle with more urgent things to deal with. 

If you do manage to get a claim submitted in time, you then have 30 days to settle it and send a payment request form to the Airbnb team. If for any reason your claim cannot yet be settled, a written request must be sent to Airbnb to extend the settlement period, the decision of which will be left up to the discretion of Airbnb. If you miss this 30-day deadline, your case will be closed and unfortunately, there isn't really anything you can do about it. If you do manage to get your claim settled and payment request sent off in time, you’ll then have to wait up to 3 months for payment to actually be processed and the time it takes is all dependant on how many claims are going through for that pot of money at the time. Not ideal if something is in need of urgent repair and you can’t afford to go forward with it without the claims money!

Clock

The Claims Process

The actual process that Airbnb hosts have to go through to make claims on the host guarantee is what we hear the most about from our customers. Here are just a few snippets from a case study we put together recently from a customer's actual experience with trying to make a claim through the Airbnb Host Guarantee:

“The whole process with Airbnb was so messy and appalling, but the long and short of it is there is no phone number to call for claims, the only communication is online”

“I assumed because my claim was so big someone would call me and talk me through the process but I was never able to talk to anyone”

“The people I dealt with online could not access any of the information I had originally submitted so they had nothing to refer to when talking to me”

“It was a very stressful, time-consuming, frustrating and upsetting process. All that needed to happen was for someone from the Airbnb team to call me and explain the process. I was feeling around in the dark, I had no idea how it was going to work”

“Airbnb handle lots of little claims, but they are not prepared for the bigger claims and they don’t have a system in place to handle them”

“They allowed a 15-year-old to make a booking but were not prepared to compensate me for that”

“I had a sofa worth £1,200 and it was drenched in beer and covered in cigarette stains, and because I only sent one photo, they only reimbursed me for one cushion cover, which was £24.”

“At the end, my claims handler emailed me saying he was going on holiday for 2 weeks and that he would be back in touch when he returned. When he got back, he eventually emailed me with my settlement offer and said if I do not respond in 24 hours then the case would be closed. I was on holiday at the time and didn't see the email, so the case was closed”

These are just a few quotes from our most recent claim that involved our customer trying to claim through Airbnb, and while we haven't gone through the process ourselves, we certainly wouldn’t even bother trying after hearing about this! 

Insurance Claim Form

In The Small Print

If you take the time to properly read the small print of the Airbnb Host Guarantee (and you definitely should!), you’ll definitely find a few clauses in there that are designed for things to not work in your favour. Make sure you have a clear understanding of:

  • HMRC: if you’re investigated by the taxman as a result of your hosting activity, Airbnb will not cover any of the legal fees 
  • Conflict of interest: if you’re not happy with the outcome of your claim with Airbnb, you won’t be able to take legal action against them. 
  • Property changes: There is an exoneration clause that states Airbnb do not even have to have an active guarantee surrounding your property if you change it in any material way. We cannot work out exactly what this clause means - but it is certainly worrying. Better think carefully before revamping that bathroom!

Small Print

How Can We Help?

First off, because we appreciate this blog post sounds like an all-out Airbnb bashing, I’d just like to make very clear that at GUARDHOG we do absolutely love Airbnb as a platform and we work with them very closely. The fact their guarantee can’t always cover losses attributed to guests is purely down to the fact that they’re not an insurance company, and in most cases people have bad experiences with the guarantee because of a lack of understanding on their part. As I’ve already said, Airbnb clearly states that the guarantee is not an insurance product, and even go as far as to recommend that hosts take out their own comprehensive insurance policies as well as having the host guarantee in place, and this is where GUARDHOG comes in. 

What the Airbnb Host Guarantee cannot cover, we can. And we can do it in a simple, cost-effective, time-efficient way…:

  • We provide insurance products that are backed by some of the most respected insurers in the industry
  • We cover
    • Malicious damage: when your guest purposefully damages your home
    • Accidental damage: when your guest has an unexpected incident that damages your home
    • Theft: when your guest, or someone else, take your stuff home with them
    • Bodily Injury (public liability): when your guest has an accident or suffers an injury in or around your home
    • Home-sharing liability: when you guest causes damage to a neighbouring property or communal area
    • Loss of income: if you have to cancel already confirmed bookings because your property is inhabitable in relation to the claim
    • Excessive use of utilities: if you get your utility bill through and it’s significantly higher than usual
    • Replacement locks and keys: if your keys get misplaced 
    • Infestation: due to food being left out or anything else
    • Legal expenses: should you be taken to court for a liability claim, if you need to have a review revoked or you’re investigated by the taxman
    • Identify theft: if your guest steal your identity 
  • We have a UK based team available via email and phone 7 days a week that are ready to support you in any way they can
  • We’ve built bespoke technology that allows you to become part of a community of trusted hosts and guests and more importantly, promoted safety amongst the sharing economy. 

Home Insurance

We love Airbnb, we wouldn’t exist without them! But we also think it’s important for hosts to know where they stand and while an argument could be made that Airbnb aren't transparent enough about their host guarantee, there also needs to be a conscious effort made on the part of the host to understand what's on offer, and what they need to go elsewhere for.  

 

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