Are Airbnb rentals safe and reliable?


The popular site, Airbnb -which allows people to rent a place or host their home to people for short amounts of time- has been apart of a booming industry in the past year or so. However, since it has become so popular, injuries and even death are now inevitable.

A New York Times article showcased one event in which a father was killed while renting a cottage down in Texas last Thanksgiving. The son of the man who was killed later wrote an essay for an online magazine. In the article he describes how his father went to try out a swing which was tied to a tree. However as he went to swing, the tree split in half and crushed his father, leaving him with little to no brain activity. His story can be found here.

When opening one’s home for rent, there are plenty of concerns for both the renter as well as the homeowner. “Let’s start with insurance. A year ago, Airbnb hosts were on their own when it came to liability, and most of them probably assumed that their homeowner’s insurance would offer coverage if a guest was hurt or worse. But most homeowner’s insurance policies have an explicit exclusion for commercial activity. Airbnb this year began offering free, automatic secondary coverage for liability, in case a host’s insurance company denied a claim. Last month, Airbnb made that coverage primary. It’s still free, and it covers up to $1 million an incident.” (NY Times)

Most of Airbnb’s customers are single individuals who only rent the space for a short period of time, therefore the insurance policies are not as complex as say the company HomeAway, which is similar to Airbnb but most of its customers are whole families who need larger accommodations (which in turn may result in more complex insurance coverage).

“Airbnb did not want to go into detail about what it pays for its insurance and the precise policy language. But Nick Papas, a spokesman, said that since it started offering liability coverage in January, eight million people had stayed with an Airbnb host in the United States and fewer than 50 hosts had filed claims. “We are extremely confident in the finances underlying our program,” he said in an emailed statement. “When we were looking to expand it, we had multiple competitive bids from different insurers. The numbers show how low the risk factors are, and they’re eager to work with us.” (NY Times)

“Paying strangers to stay in their homes requires that we assume some risk, and we may simply have to get comfortable that we may never know exactly how much risk.”

 

Source: http://www.nytimes.com/2015/11/14/your-money/death-in-airbnb-rental-raises-liability-questions.html

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