If you’re already looking into the home-sharing industry, you should know that Airbnb offers insurance for all hosts. The company calls it Host Protection Insurance; you’d be glad to know that it’s free of charge. You should also know that the insurance covers up to $1,000,000 in damages. While that may sound like a lot of money, damage and lawsuit expenses can add up fairly quickly. The Host Protection Insurance doesn’t and can’t cover everything. This is important for you to understand as a host; after all, you need to know what you can do in the event that your Airbnb insurance is just not enough.

What is Covered?

The Host Protection Insurance covers a few different kinds of liabilities. It also serves as primary insurance for any host. This means that the Host Protection Insurance will provide coverage before another insurance policy does. The $1 million automatic policy covers various claims including bodily injury and lawsuit, third-party bodily injury, third-party liability lawsuit, and property damage claims.

When your guest gets injured in your property, Airbnb’s insurance policy will automatically provide coverage for a lawsuit. For example, if your guest slips while showering in the bath and sues you, the Host Protection Insurance should give you coverage. If your guest happens to injure a third party in your property and it resulted in a lawsuit, Airbnb will cover that as well. When it comes to property damages, the Host Protection Insurance will only cover structural damages and nothing more. If one of your guests cracks a hole in your wall somehow, you can be sure that Airbnb’s insurance will cover that as well.

What is NOT Covered?

As you can see, even if Airbnb offers $1 million in protection, the insurance doesn’t cover everything. There are still a lot of limitations in the policy; this can result to a lot of money coming out of your pockets if you don’t have extra protection.

First off, the insurance will not cover anything that’s not accidental. Intentional damage or injury happens all the time. And in that case, you can pretty much not count on the Host Protection Insurance at all. Airbnb will also not cover damages to any renter’s property or belongings—accidental or otherwise. The insurance will also not cover lawsuits due to defamation of character or slander.

As far as property damage is concerned, the Host Protection Insurance will not cover damage to your personal belongings as a host. Airbnb’s insurance will not cover any of the furniture or appliances that are in your rental. This is probably one of the most common types of damages you get as an Airbnb host. Most renters are not particularly careful with property that’s not theirs to begin with. Fortunately, Airbnb offers a Host Guarantee, which stipulates that you as a host get property damage protection worth up to $1 million. This is an automatic protection as well and will not cost you any extras. Unfortunately, the insurance doesn’t cover theft, loss of cash and profit, and damage caused by pets either. These happen all the time in Airbnb properties.

Finally, you should know that Airbnb’s insurance will not cover any property damages as brought on by natural disasters. This includes earthquakes, flooding, storms, sinkholes, brushfires, and others. This is the case whether you have a guest staying in the property at the time of disaster or not.

Extra Coverage

All the liabilities and damages that the Host Protection Insurance doesn’t cover should prompt you to look for outside coverage right away. Otherwise, it could get expensive for you as a host if you don’t have enough insurance in your back pocket. In this case, the first things you should look into are homeowner or renters’ insurance. As long as you are operating a legitimate rental property through Airbnb, you shouldn’t have any issues procuring an insurance policy to cover damages that the Host Protection Insurance doesn’t. You should’ve already checked your local laws in order to determine if you can operate a home-sharing business to begin with.

How often your Airbnb is booked will basically determine the type of extra insurance you get. Homeowner or renters’ insurance will be enough if you don’t operate the business too frequently. However, if you are booking your property year-round or if you have a renter more often than you don’t, you might need a bigger policy. Commercial insurance policies will often do the job. Your local laws should be able to give you more information. Otherwise, you should talk with an underwriter to determine what kinds of insurance coverage you might need to protect your particular property. It’s always better for you to be safe rather than sorry.

Filing a Claim

If you’re filing a claim against a guest, you need to notify the guest beforehand. You can resolve most issues with guests directly through the Resolution Center. If this isn’t possible, you should contact Customer Service right away. The first step to filing an insurance claim with Airbnb is to make sure that your documentation is adequate. Having proper documentation will make your life as a host so much easier. Photographs are necessary. If the property is damaged somehow, you should have receipts ready at hand. You’ll also need a way to prove ownership. If needed, you should file a police report. For some areas, Airbnb might require a police report if the damages are over $300. Once you contact Airbnb about a claim, they’ll connect you with a claims administrator from one of their third-party insurance providers, Lloyds of London or Zurich Insurance plc.

If a guest is filing a claim against you as a host, Airbnb will assign a claim adjustor to resolve the claim for you as much as possible. Remember that Airbnb’s Host Protection Insurance policy automatically covers you and your property. You really don’t need to do anything else for the policy to protect you. You automatically agree to the terms of the insurance as soon as you agree to become an Airbnb host.