Airbnb Offers Users $1 Million in Liability Coverage
When it comes to find affordable insurance, many people will busy themselves with searching through the different types of car insurance and reading homeowners insurance claim tips before choosing a plan. Liability coverage, however, is often neglected. This type of insurance protects the purchaser from the risks of liabilities posed by lawsuits and other claims, making it a useful protection in the event that anyone is injured on the property or another incident occurs. However, few people seem to know what it is, or understand how important it can be. Now, companies like Airbnb, which allows users to rent out their homes to interested visitors, are offering their users liability coverage to help them protect against potential problems and lawsuits. What is this development, and how will it affect society’s view of this under-appreciated form of insurance?
In early December, Airbnb announced that it would be offering free $1 million liability coverage to its tens of thousands of hosts. While this deal seems amazing, it isn’t quite as good as it sounds: the coverage is secondary, meaning that hosts will have to make claims to their own insurance companies before turning to Airbnb. Unfortunately, a report from The New York Times reveals that most homeowners and renters insurance policies do not cover regular commercial activity in a residential setting.
This is likely upsetting to homeowners who currently rent out rooms in their home, or were planning to start. Ultimately, it seems that Airbnb’s decision to offer liability coverage is due to a San Francisco ruling which requires hosts to have at least $500,000 in liability coverage. While it might seem like a cruel ploy, the company likely helped many users in the California city who would have been unable to afford to host tenants otherwise.
In the end, liability coverage may not be needed for ventures like Airbnb: both the guest and the host are vetted by the company before either can use the service, which likely reduces many potential problems. Accordingly, the company reports that it helps facilitate over 26 million safe visits a year. However, cases like these underscore exactly how important liability coverage is: before you Google car insurance tips and tricks, it might be important to consider what might happen if a branch from your property struck your neighbor’s car (or worse, your neighbor), causing a lawsuit. If you want to protect yourself in such an event, its time to start searching for liability coverage. More like this.