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Running an Airbnb rental property can be a profitable business. On average, an Airbnb host earns almost $8,000 annually. Many Airbnb hosts put a lot of time, effort, and money into their rentals to make sure their guests have a great vacation and keep their business running successfully. When a host rents out their property, however, they are taking on financial risk. It is crucial that Airbnb hosts know how to protect themselves and their property if a guest damages their rental.
What happens when your Airbnb guest refuses to pay for damages?
Airbnb hosts have several options available if a guest causes damage to their property and refuses to pay. Airbnb’s Host Protection Policy automatically protects Airbnb hosts. If a guest causes damages, the host can file a claim with Airbnb’s dispute resolution service. In addition, hosts can invest in a rental insurance policy to cover any damages that Airbnb’s policy may not cover.
Wear and Tear vs. Serious Damage
It is important for hosts to understand that normal wear and tear will occur in their rentals. Some guests may travel with kids or pets, so accidents are bound to happen. Some examples of normal wear and tear in an Airbnb rental include:
- Minor tears in rugs or curtains
- Scuff marks on the walls or floors
- Old furniture or appliances breaking
- A broken plate or cup
- Minor stains on the carpet from mud or spilled drink
These typical signs of wear and tear are something that hosts must accept. An Airbnb isn’t like a regular home and will experience more traffic from a variety of people.
Severe damage, however, differs from normal wear and tear, and if a guest seriously damages an Airbnb, a host needs to be compensated for the repairs or replacement. Serious damage could include:
- Broken window
- Holes in the wall
- A broken television
- Permanent stain to a new piece of furniture
- Stolen property
It is common for guests to contact the host when serious damage occurs. However, there are occasions when the guest doesn’t disclose the damage and is long gone before the host realizes what happened. For this reason, hosts need to contact Airbnb for reimbursement or carry a short-term rental insurance policy like the kind offered by Proper Insurance which specializes in short-term rental insurance.
If you are looking for more tips and information about protecting your rental furniture, check out our article about Airbnb furniture damage.
Attempt to Resolve the Issue Directly with Your Airbnb Guest
If you discover that a guest has damaged property during their stay, your first step is to try and resolve the issue with the guest directly and ask for a reimbursement. Log onto Airbnb’s Resolution Center and follow these steps:
- Click “Request money.”
- Select the guest who caused the damage
- Under the reason, choose “Damage or missing item.”
- Complete the steps for the “Let’s get you some help” session
- Complete the “Request reimbursement” session
If your guest agrees to the charges, they pay Airbnb, and Airbnb will release the funds to you. However, if your guest does not agree or refuses to pay, you will have to file a claim with Airbnb’s Host Guarantee program.
What is Airbnb’s Host Guarantee?
When you become an Airbnb host, you are automatically protected by Airbnb’s Host Guarantee program. This program provides hosts with up to $1,000,000 property damage protection if a guest damages your property or belongings and the guest doesn’t pay for the damages.
Host Guarantee has limitations and will not protect hosts in the following scenarios:
- Theft of cash, artwork, jewelry
- Damage done by pets
- Damage from ordinary wear and tear
- Bodily injury to a guest on your property
If you are concerned about the limitations on Airbnb’s Host Guarantee, you may want to start checking out short-term rental insurance policies. Check out this article for a list of popular insurance companies that offer great short-term rental coverage.
How to File a Reimbursement Request with Airbnb
If your guest refuses to pay for damages to your rental or your property, you can file a reimbursement request with Airbnb.
- You will need to gather evidence of the damage, including photos, videos, repair estimates, or receipts.
- Using the resolution center on the Airbnb website, you can request reimbursement using the Insurance Program Intake Form. This form asks you for information like the type and date of the incident and whether other types of insurance may cover any damage.
- An Airbnb support specialist will contact you to guide you through the rest of the process for reimbursement.
Requests for reimbursement must be submitted 14 days from the guest’s checkout or before the next guest checks in, whichever is earlier.
Carrying an Additional Rental Insurance Policy
Although Airbnb offers both a Host Guarantee for damaged property and a Host Insurance program for liability, there are limitations to both coverages. For additional protection, Airbnb hosts should consider investing in a short-term rental insurance policy.
Only a couple insurance companies like Proper Insurance offer short-term rental policies that will cover a host in the event of damage, theft, and liability. Some policies completely replace your homeowner’s insurance and include business liability coverage, while other policies are just additions to your current homeowner’s policy.
Although these policies will cost the host, this extra insurance could end up saving an Airbnb host hundreds if not thousands of dollars if an accident happens on their property. If you are interested in a short-term rental policy for your Airbnb, read our review on the Top 5 Insurance Options for Hosts.
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Tips for Protecting Yourself and Your Property
There are several actions you can take to protect yourself and your property from damage or theft. These tips will also help you file a successful claim for reimbursement if a guest does damage or steal your property and refuses to pay.
Inventory- Take inventory of all the items in your Airbnb. This includes furniture, appliances, linen, and accessories. You should save receipts for anything you purchase for your Airbnb and write down the serial numbers of expensive items.
Video Walkthrough- An easy way to take inventory of your property is to do a video walkthrough. The video is also a great way to document how your property normally looks. You should update your video walkthrough to account for everyday wear and tear.
Vet Your Guests- It is important to vet your guests before approving their reservation requests. Does your guest have a complete Airbnb profile? Do they have reviews from other hosts? Are there any red flags on their profile? Knowing who is staying at your property is a great way to protect your property.
Remove Valuables- While some Airbnb properties are separate units that the host never uses, it isn’t uncommon for Airbnb hosts to rent their home while they are away. This puts hosts at risk because they may have valuables left behind. Hosts should be sure to remove or lock up any valuables in their rental property. This could include jewelry, artwork, sentimental items like photo albums, or tax documents.
Require a Security Deposit- Airbnb allows hosts to require guests to pay a security deposit. Airbnb holds this deposit during the guest’s stay. If the host finds that their property has been damaged, they can request a security deposit claim from Airbnb. If there is no damage reported, the deposit is released back to the guest.
Accidents and property damage are a reality that Airbnb hosts must face when renting their property. In some cases, guests will willingly compensate a host for damages they caused. When a guest refuses to pay, hosts are forced to seek compensation through different avenues. This can be done by requiring a security deposit, utilizing Airbnb’s Host Guarantee program, or purchasing a short-term rental insurance policy.