Airbnb Launches AirCover With $1 Million in Damage Protection for Hosts

On 9 November 2021, Airbnb announced AirCover, a package of host protection that it said applied free and automatically to every new and existing host. The company described it as $1 million in damage protection and $1 million in liability coverage, plus protection for pet damage, deep cleaning and lost income. It was the lead item in the Airbnb 2021 Winter Release, a set of more than 50 upgrades.

The limits were on Airbnb's own pages. Its help article on host damage protection, as archived on 15 November 2021, said the protection was not an insurance policy, gave the guest 72 hours to pay before Airbnb Support came in, and excluded ordinary wear and tear and acts of nature.

What AirCover included

Airbnb's announcement listed eight things a host received: $1 million in damage protection, $1 million in liability insurance, income loss protection, pet damage protection, deep cleaning protection, a 14-day filing window, quicker reimbursements and a faster track for Superhosts.

Airbnb's release page, in a copy the Wayback Machine archived on 9 November 2021, described each one. According to that page, the liability insurance applied in the rare event that a guest was hurt, and the damage protection covered damage by guests to a host's space and belongings, valuables included. Income loss protection, it said, reimbursed income lost when a host canceled confirmed bookings because of damage, and a host had 14 days to report damage, even with bookings back to back.

The same page put reimbursement for guest damage at 9 days on average. That was the company's figure. The page gave no period or basis for it, and none of the reports cited here tested it.

Airbnb said AirCover was available from the day of the announcement. The archived page also listed a new option for hosts to add a pet fee to the nightly price.

What it replaced

Airbnb's announcement said the company had pioneered host protection a decade earlier with the Host Guarantee and, after ten years of learning from hosts, had reworked the program, widening the protection and speeding up payouts.

Brian Chesky, Airbnb's co-founder and chief executive, gave TechCrunch a blunter account the same day. He said: “We already had a $1 million guarantee and $1 million liability insurance, so we had the anchor of a great program. But there were a lot of issues with it.”

Asked about pet damage, he said many claims had already been filed and that Airbnb had not been covering them because they fell outside the policy. Hosts who took pets were paying for deep cleaning out of pocket, he said.

The limits on Airbnb's own pages

The help article on host damage protection carried a disclaimer. It began: “Host damage protection isn’t an insurance policy.” It went on to say the protection did not cover hosts who offered stays through Airbnb Travel, LLC, or hosts in mainland China or Japan.

The article listed what was covered: damage to a host's place or belongings caused by a guest or others, unexpected cleaning costs, and income lost when a host had to cancel confirmed Airbnb bookings because of that damage. It listed what was not: ordinary wear and tear, losses from acts of nature such as earthquakes and hurricanes, and injury or property damage to guests or others, which it said might be covered by host liability insurance. Other exclusions applied, it added.

Under the article, a request went to the guest first. The host was told to gather evidence, such as photos, videos, estimates and receipts, and to file an AirCover request through the Resolution Center within 14 days of the responsible guest's checkout. The guest then had 72 hours to pay. If the guest declined to pay the full amount or did not respond, the host was prompted to involve Airbnb Support, and had to do so within 30 days of the damage or loss.

Airbnb's AirCover page, as archived on 13 November 2021, added a caution of its own. It said AirCover was not a substitute for personal insurance, and told hosts to talk to their insurer about how, or whether, their policy overlapped with it.

Why Airbnb did it

The announcement gave Airbnb's reason. More guests were choosing Airbnb, it said, more people wanted to host, and AirCover was meant to reassure the company's existing four million hosts and make the first step easier for new ones.

TechCrunch reported the business problem behind it: as pandemic restrictions loosened and people traveled again, supply was not meeting demand, it wrote, citing Chesky. He said fear of something happening to their house was one of the biggest obstacles to people hosting, and that professional hosts might buy business insurance while most regular people relied on Airbnb. He said: “I think the biggest impact AirCover is going to have is that this is going to bring a whole new generation of people into the Airbnb fold to become hosts.”

The announcement did not say what AirCover would cost Airbnb. Airbnb's third-quarter letter to shareholders, filed with the US Securities and Exchange Commission on 4 November 2021, said operations and support costs for that quarter, excluding the impact of stock-based compensation, rose 32% from a year earlier to $217 million, driven by customer support and host protection related costs that it attributed to the increase in nights stayed.

Chesky tied the release to repairing relations with hosts. In March 2020, he told TechCrunch, he overrode hosts' cancellation policies and refunded more than $1 billion of guest bookings without consulting them, which he said angered hosts and broke some trust. Pet damage and the problems with the Host Guarantee, he said, were things hosts had been raising.

How it was reported in November 2021

The reports cited here carry the company's account. Chesky told TechCrunch that the reception from existing hosts had been very good. None of those reports quotes a host, a host association or an insurer on AirCover, and none followed a claim through the process the help article described.

ShortTermRentalz reported on 15 November 2021 that AirCover, the Translation Engine and Accessibility Review headlined the upgrades, and noted that the release came as Airbnb reported the highest revenue and net income in its history.

Chesky predicted that, with a way to charge for pets and protection against pet damage and deep cleaning, cleaning fees would come down and more hosts would accept pets.

What it meant for hosts

For a host in November 2021, AirCover needed no sign-up and no payment. What it needed was attention to the terms Airbnb published that month.

• The clock: 14 days from the guest's checkout to file a request in the Resolution Center, 72 hours for the guest to pay, and 30 days from the damage or loss to involve Airbnb Support.
• The evidence: photos, videos, estimates and receipts, which the help article told hosts to gather.
• The gaps: ordinary wear and tear and acts of nature were excluded, and the damage protection did not extend to hosts in mainland China or Japan or to stays offered through Airbnb Travel, LLC.
• The insurance question: Airbnb's own page said AirCover was not a substitute for personal insurance and sent hosts to their insurer.
• The fees: a host could add a pet fee to the nightly price. The help article said cleaning and pet fees were meant to cover expected costs, and the protection unexpected ones, such as removing smoke odor.

Sources

1. Airbnb Newsroom, Introducing the Airbnb 2021 Winter Release: 50+ upgrades and innovations across our entire service (9 November 2021).
2. TechCrunch, Airbnb CEO Brian Chesky discusses the future of work and the one thing he’d do over (9 November 2021).
3. ShortTermRentalz, Chesky predicts “travel revolution” among 50+ Airbnb upgrades (15 November 2021).
4. Airbnb Help Center (Wayback Machine capture of 15 November 2021), Host damage protection (15 November 2021).
5. Airbnb (release page, Wayback Machine capture of 9 November 2021), Airbnb 2021 Winter Release (9 November 2021).
6. Airbnb (AirCover page, Wayback Machine capture of 13 November 2021), AirCover: Top-to-bottom protection, free for Hosts, only on Airbnb (13 November 2021).
7. Airbnb, Inc. (filed with the US Securities and Exchange Commission), Q3 2021 Shareholder Letter (Exhibit 99.1 to Form 8-K) (4 November 2021).