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Multifamily buildings are popular among Airbnb guests. They have amenities guests love, are located in popular areas where other housing might not be available, and are well kept by property managers and homeowners associations. Perhaps this is why 50% of booked stays on Airbnb are in multifamily buildings.

For multifamily building owners and residents who use Pillow, a topic that commonly arises is liability and damage insurance.

Rare liability and damage incidents

The chance of anything going wrong for multifamily building hosts is extraordinarily small. Of the more than 30 million stays in 2016, significant property damage (claims reimbursed for more than $1,000 under the Airbnb Host Guarantee) was reported in only 0.009% of stays. At that rate, you could host a new reservation every single day for more than 27 years without expecting to file a single significant property damage claim under the Host Guarantee.

Pillow spoke with a top multifamily insurance company regarding its property liability claims in apartment buildings, and the company explained that incidents are significantly more frequent (3600%) for long-term leases than for short-term rentals.

Security Deposits for Multifamily building guests

Although incidents are very rare, most involve property damage to the unit and are covered by the security deposit. The security deposit makes guests feel more responsible for the property and significantly reduces the chances of damage.

Multifamily building owners who use Pillow have full control over the minimum security deposit for all Airbnb guests staying in their building. Building owners plug in their preferred amount within Pillow and it will take effect across all of their residents Airbnb listings. Building management is not involved in collecting, using, or releasing this deposit. The residents, who are the hosts, are responsible for collecting the automatic payment through Airbnb and using to cover damage or loss.

When a security deposit isn’t enough

When there is damage or injury that exceeds the the cost of the security deposit, Airbnb provides additional coverage for multifamily properties and residents. These Airbnb protections cover two categories:

Airbnb Host Protection Insurance

How exactly does the Airbnb Host Protection Insurance program work?

The Airbnb Host Protection Insurance program was created to cover property owners, including multifamily building owners and their residents, against third-party claims of property damage or bodily injury — up to $5 million per incident for Multifamily buildings using Pillow.

Multifamily building owners and Multifamily hosts can rest assured that Airbnb has their backs. The Host Protection Insurance program is available in spite of any other insurance buildings owners and residents might have. The Host Protection Insurance program is applicable for injuries or damages that occur during an Airbnb stay.

For many multifamily building landlords and hosts, the Host Protection Insurance program acts as their primary coverage for claims filed due to incidents that occur during an Airbnb stay.

The Host Protection Insurance program is also designed to cover claims filed by a multifamily building landlord against the host. (This often occurs when a tenant hosts an Airbnb guest who damages building property.) In this event, Airbnb would protect the host.

Examples:

  • A guest walks into a glass door, breaks his nose, and files a claim against the host or landlord.
  • While lifting weights, a guest drops a weight on a resident’s foot and the resident files a claim against the host or landlord.
  • A picture on the wall comes loose and falls on a guest, and the guest files a claim against the host or landlord.

Airbnb Host Guarantee

The Airbnb Host Guarantee was created to protect multifamily building landlords and tenants hosting Airbnb guests in the event that a guest causes property damage to a unit or personal belongings.

Every booking on Airbnb for multifamily buildings is protected by the Host Guarantee without any extra cost to the landlord or tenants hosting short-term guests.

For adequate protection of multifamily buildings, the Host Guarantee will compensate eligible hosts (landlords or tenants) for damages of up to $1 million. In the event of a damage, a multifamily building host is required to submit a request within 14 days after the guest checks out or before the next guest checks in.

Examples:

  • The guest gets angry at after his sports team loses, and he takes out his frustration by putting his fist through a wall.
  • The guest leaves smelly fish exposed while he is out for the day. Removing the odor requires a special and expensive cleaning.
  • The guest spills a full glass of merlot on the host’s brand new white Ethan Allen couch.

Proactive ways to reduce risk

Multifamily building hosts can proactively put mechanisms in place to reduce risks of damage or liability. The greatest advantage of Airbnb are the advanced tools hosts can use to weed out guests that might be problematic.  Hosts can supplement Airbnb’s screening tools with their own innovative vetting procedures.

“If you’re new to being a host or you’re struggling to turn ideas into words, try approaching this thought experiment by imagining reliable colleagues, friends, or family members…then deduce what it is about these people that you consider reliable.”Tips For Using Airbnb to Screen Guests, Guesty.com (@Guesty)

Multifamily building owners who use Pillow have the advantage of setting restrictions on the types of Airbnb guests their residents can accept. In the Pillow system multifamily building owners can set blanket policies that take effect on all their residents Airbnb listings and cannot be overridden. This is possible because of the Airbnb and Pillow partnership solidified in November of 2017. Multifamily building owners who use Pillow decide how many days a year residents can lease to short-term guests, if pets are okay and whether parties are allowed. Other levers coming in the future to building owners include setting blackout dates, maximum amount of guests per stay, guest Airbnb verification requirements (Examples: Government ID, Phone and Social Media profiles), maximum nights per reservation, and minimum Airbnb rating.

Here’s a list of ideas from Hostfully (@hostfully) to get started: Tips to Protect Your Space & Attract Great Guests.

Airbnb Insurance Limitations

The Airbnb Host Protection Insurance and Host Guarantee don’t provide coverage for all instances of damage or liability. Some examples would be if pets are injured, a car crash occurs in the parking garage, and natural disasters. Although not necessary, some multifamily building owners and hosts choose to have supplemental liability insurance and damage protection. This more extensive protection is available for short-term rentals; a few insurance partners to checkout are Slice and Lemonade. Some insurers are even offering home-sharing liability policies that you can buy on a month-to-month basis.

About Pillow

Pillow is a user-friendly platform for multifamily building landlords, property managers, and tenants who are interested in Airbnb or currently use Airbnb for short-term rental of their spaces.

As an exclusive multifamily partner with Airbnb, Pillow’s platform supports transparency, control, revenue share, insurance, and communication involving listing management for maximum Airbnb safety and security. With Pillow, building owners and residents can significantly benefit from Airbnb short-term rentals via a simplified method.

About the Author: Todd Conway is Co-Founder of Pillow

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