A liability risk for Airbnb hosts
“It makes hosting from Airbnb more attractive,” added Bradshaw.
So what are the chances that they or someone else will need to use the insurance? One of the reasons Airbnb has taken so long to offer liability coverage is that insurance company actuaries don’t like to buy anything until they have years of data on deaths, dismemberments. , drownings, complex fractures, crushes, etc.
Airbnb shared this data with its underwriters (which requires the company to pay an unspecified deductible before coverage takes effect), but the company has not shared it with me. “Over 26 million travelers have had a safe and positive experience on Airbnb, including over 16 million in 2014 alone,” said Jakob Kerr, an Airbnb spokesperson, in an emailed statement. . “We respect the privacy of our hosts and guests and do not comment on such matters. When I replied that disclosing the gross number of accidental fatalities and injuries did not violate anyone’s privacy, he said he had nothing to add.
Mr Wolf, the insurance manager, said he expects $ 2 million in liability claims each year out of the 7,000 rentals he has insured through the Assure product. If each of these is occupied 180 nights each year, that means $ 1 million in claims for 630,000 nights of occupancy each year. Customers can feel good about these chances. Busy hosts might be less comfortable. Airbnb, with its 800,000 listings at any given time, has more to worry about.
Ordinary consumers who don’t host or stay in Airbnb units may think it has nothing to do with them. Chubb, however, sees it differently. If Airbnb is successful in sharing the risk with life and health insurance companies, then everyone’s premiums must increase to cover it. “If you don’t underwrite properly, it drives up prices for the average homeowner,” said Christie Alderman, vice president of Chubb Personal Insurance.
Insurance companies could solve this problem by asking all policyholders about their accommodation habits, but none of the 10 people I contacted said they had changed their policies as rental housing grew. They should ask.
As for Airbnb hosts, they have a choice. They can just tell their insurance companies what exactly they are doing, what insurance companies and Airbnb ask them to do. Airbnb’s Golden said the company doesn’t know what percentage of its hosts do; my educated guess is that it’s a tiny fraction. Or they can buy a vacation / owner’s rental policy from a company like CBIZ, which offers it on their website.