旅行者および出張者両方の代替宿泊オプションとして、Airbnb、VRBO、HomeAway、TripAdvisor Rentalなどのホームシェア会社がますます人気となっています。Forbesの記事によると、Airbnbは「世界の81,000都市に500万近くの宿泊オプションを用意」、また「Airbnbの企業価値は現在、少なくとも$380億」1 としています。テクノロジー・ニュースサイトであるRecodeの2017年の記事によると、Airbnbの「成長率は依然として顕著」であり、2015年から2016年のゲスト利用者数が約200%増加、そして2016年から2017年は25%増加の見込みです2。ホームシェアは、明らかにビッグビジネスであり、ますます大きくなっています。
As I researched using a home-sharing service for my next vacation, I started to think about how insurance works for the hosts and had a whole slew of questions. Does Airbnb offer insurance? How does homeowners insurance or renters insurance work with Airbnb rentals? Are insurance companies seizing the opportunity in this new line of business? What are the risks?
As a host, renting a home or apartment poses many risks. What would happen if a renter forgot to turn the stove off and started a fire? What if a guest slipped and fell by the pool, incurring medical expenses from the injury? Are these risks covered under homeowners insurance or renters insurance?
On the flip side, for a guest, insurance is also important for peace of mind during the rental period. What would happen if a guest suffered an injury in the rental and the host did not have insurance to cover the medical expenses incurred? The guest would either be responsible for the medical expenses or have to file a potentially lengthy and expensive lawsuit. Knowing that the host has proper insurance can provide a sense of comfort for the renter.
Most homeowners or renters insurance policies have exclusions for damage or personal injury that occur when renting out a home. With homeowners policies having exclusions for these rentals, hosts will need to find insurance from another source. For example, hosts can look for insurance from the home-sharing broker such as Airbnb, from an insurance company with a non-owner-occupied policy or a home-sharing endorsement, or even from an insurtech company that offers on-demand insurance products.
What do different home-sharing brokers offer as insurance options? Airbnb makes two forms of insurance available to hosts, host protection insurance and host guarantee insurance. The host protection insurance is a primary insurance coverage up to $1 million per occurrence that protects against third-party claims of bodily injury or property damage to guests that is not intentional.3 The host guarantee insurance covers damage to a host’s property and does cover intentional damage. The host guarantee insurance has some exclusions such as personal injury and property damage from third parties (covered under host protection), damage caused by pets, and damage to shared or common areas of the building that aren’t part of the listing itself.4 Both policies are free to the host, but there is no option to purchase additional coverage through Airbnb.
The insurance offered by Airbnb is a great start, but what do competitors such as HomeAway or TripAdvisor Rentals offer? HomeAway offers $1 million liability insurance coverage for all rentals. TripAdvisor vacation rentals and all affiliated companies such as FlipKey and holidaylettings, however, do not offer any insurance for their hosts. For these home-sharing companies, because hosts cannot get insurance through their brokers, they need to find insurance elsewhere or be left without any coverage.
With the rise of vacation rentals and the risks these rentals pose, insurance for hosts is an opportunity insurance companies should be looking into. Can insurers create new policy types to help hosts who cannot get insurance through their home-sharing brokers? Is there an endorsement that can be added to cover home-sharing rentals? Should insurers be looking into collaborating with home-sharing companies like Airbnb to help insure all hosts while rentals are active? What on-demand insurance products are available for hosts?
Because hosts might not rent their homes 365 days a year, they may want to look into having homeowners policies for part of the year and non-owner-occupied policies for when they do plan to rent their homes. Insurance companies could work with hosts to create unique policies that switch policy forms based on when a rental is taking place, thus tailoring policies to a host’s specifications.
An alternative option is for insurance companies to add home-sharing endorsements to homeowner policies. According to an article published by Gen Re, “Two national writers have developed endorsements for their insureds to add coverages for home-sharing onto their homeowners policies”.5 An article in Insurance Journal discussed how ISO has started to tackle the issue of home-sharing insurance by introducing new “options to address exposures that policyholders may face when renting out all or parts of their home.” The new ISO insurance options “address a number of exposures faced by home-sharing hosts including: liability, theft, vandalism, and damage to guests’ property”.6 These are just a few of the options that are starting to be developed to help protect hosts in the growing on-demand economy.
As I researched insurance for different home-sharing sites, I could not help but compare this to ride-sharing companies. Companies such as Uber and Lyft have run into a similar issue with how auto insurance policies would turn on and off depending on whether a car is in use for business or personal use. Uber provides some coverage when the app is turned on7 because auto policies do not cover drivers when cars are in use for business. This would be similar to how Airbnb coverage is turned on when the host has a renter in the home.
One company that has started offering on-demand insurance for home rentals is Slice. It offers home-sharing insurance in the United States that can be turned on and off as needed and covers the house, contents, and any additional buildings on the property for replacement costs. The coverage also includes living expenses incurred during repairs.8 In a way that is similar to how Uber provides insurance that turns on and off as needed, Slice structures its insurance to turn on during a home rental. If a home-sharing broker’s insurance is insufficient or a broker does not offer any, insurance companies like Slice can help fill that insurance gap.
Some home-sharing companies like Airbnb offer insurance, but others such as Trip Advisor Rentals offer no such coverage. In today’s on-demand economy, the rise in home sharing provides an opportunity for insurance companies to structure unique forms of insurance to cover hosts during rental stays. Hosts need to know who has their back when renting their homes, and insurance companies can branch out into the wide world of the sharing economy. Hosts, renters, and insurance companies can work together to make sure that everyone is covered.
1Trefis Team (May 11, 2018). As a rare profitable unicorn, Airbnb appears to be worth at least $38 billion. Forbes.com. Retrieved November 1, 2018, from https://www.forbes.com/sites/greatspeculations/2018/05/11/as-a-rare-profitable-unicorn-airbnb-appears-to-be-worth-at-least-38-billion/#4c1dabe92741.
2Molla, R. (July 19, 2017). Airbnb is on track to rack up more than 100 million stays this year—and that’s only the beginning of its threat to the hotel industry. Recode. Retrieved November 1, 2018, from https://www.recode.net/2017/7/19/15949782/airbnb-100-million-stays-2017-threat-business-hotel-industry.
3Airbnb. Host Protection Insurance. Retrieved November 1, 2018, from https://www.airbnb.com/host-protection-insurance.
4Airbnb. Airbnb’s Host Guarantee. Retrieved November 1, 2018, from https://www.airbnb.com/guarantee.
5Unger, C. (December 2016). The home-sharing economy and upcoming coverage options in the U.S. Genre.com. Retrieved November 1, 2018, from http://www.genre.com/knowledge/publications/pwm1612-36-en.html.
6Insurance Journal. ISO files homesharing coverage options for homeowners’ policies. Retrieved November 1, 2018, from https://www.insurancejournal.com/news/national/2016/11/16/432335.htm.
7Uber. Insurance: How You're Covered. Retrieved November 1, 2018, from https://www.uber.com/drive/insurance/
8Slice. Homeshare Policy Summary. Retrieved November 1, 2018, from https://slice.is/homeshare-policy-summary/.