Airbnb AirCover For Hosts - Leaving our butts in the breeze

Airbnb offers a compelling service at first glance for hosts. What is there not to like? You simply list your property(s) and the leads magically pour in. In addition, if anything goes wrong, you have a ginormous company behind you to cover any damages, liability undergone free of charge! While a 1 million dollar insurance policy sounds like a dream come true for hosts, scratch beneath the surface and things are mired in "complication". The reality is that hosts are still responsible for their own property and Airbnb cannot be sued.

The notion of being able to just offload all responsibilities onto Airbnb's capable hands is an excellent marketing ploy for both hosts and guests. However, if you read the fine print especially as a host, you see it's not what it's cracked up to be.

AirCover,  the devil is in the details

I know all of you have read the fine print of AirCover.... Well if not, I will break down some of the "nuances" to put it lightly.

Arbitration Clause: Section IX of the Host Damage Protection Terms requires hosts to agree to arbitration in case of disputes with Airbnb, rather than going through the court system. This clause is problematic for hosts because it:

• Limits their ability to seek justice through the courts (Section IX.1)
• Requires them to pay half of the arbitration fees, which can be costly (Section IX.3)
• Allows Airbnb to amend the arbitration agreement unilaterally, with only 30 days' notice (Section IX.16)

This clause is bad clearly awful for us hosts because it gives Airbnb too much control over the dispute resolution process and can limit hosts' access to justice, aka recovering funds from a horrible guest.

Example:

Let's say John, a host on Airbnb, has a guest who breaks a window in his rental property while trying to enter through it because they couldn't find the key.

Airbnb denies John's claim under Host Damage Protection, stating that the damage was "not accidental" but rather caused by the guest's "reckless or intentional behavior" to access the premises.

In this scenario, Airbnb might argue that the guest's actions were not truly accidental, but rather a result of their own carelessness or negligence. However, from John's perspective, he had taken reasonable precautions to ensure the property was secure and accessible, and the guest's actions were unforeseen.

Indemnification Clause: Section X of the Host Damage Protection Terms requires hosts to indemnify Airbnb against any claims or damages arising from their use of the platform, including those related to Host Damage Protection. This clause is problematic for hosts because it:

Requires them to take on significant liability for issues that may not be their fault (Section X) Applies even if the host has done nothing wrong and has simply listed their accommodation in good faith.

This clause is bad for hosts because it shifts too much risk onto them and can leave them vulnerable to financial losses, even if they have acted responsibly.

Example:

Let's say Michael, a host on Airbnb, has a guest who claims that they were exposed to mold and suffered health problems as a result of staying at his rental property. The guest sues both Michael and Airbnb for damages, alleging that the company was negligent in allowing the listing to go live despite knowing about the mold issue per previous reviews.

Although, Michael had hired a professional cleaning service to remediate any mold issues before the guest's stay, Airbnb claims that it is not responsible for the guest's injuries because it only provides a platform for booking and does not guarantee the condition of the properties listed on its site.

Under the Indemnification Clause in the Host Damage Protection Terms, Michael is required to indemnify Airbnb against any claims or damages arising from his use of the platform, including this lawsuit. This means that Michael must pay for Airbnb's legal defense costs, even though he believes that the company was partially responsible for the guest's injuries due to its failure to properly screen and inspect the property before allowing it to be listed on its site.

Indemnification Clauses are standard operating procedures for companies that offer platforms.  Some of you might be simp'ing for Airbnb, but let's not forget the promise of AirCover 1 million dollar marketing insurance policy.

Assignment Clause: Section X of the Host Damage Protection Terms allows Airbnb to assign or transfer the agreement without the host's consent, but prohibits hosts from doing so. This clause is problematic for hosts because it:

• Allows Airbnb to unilaterally change the terms of the agreement (Section X)
• Gives Airbnb too much flexibility and control over the relationship

This clause is bad for hosts because it creates an imbalance in the relationship between hosts and Airbnb, giving Airbnb too much power and flexibility.

Example:

Let's say Emily, a host on Airbnb, has been renting out her apartment in New York City through the platform for several years. She has built up a strong reputation and has consistently received positive reviews from guests. However, due to changes in the local real estate market, Emily decides to sell her apartment to a new owner.

Under the Assignment Clause in the Host Damage Protection Terms, Airbnb is allowed to assign or transfer its rights and obligations under the agreement to any third party without notice to or consent from Emily. In this case, Airbnb decides to assign its contract with Emily to a new company called "Vacation Rentals Inc." (VRI), which is owned by one of Airbnb's investors.

As a result of this assignment, VRI becomes responsible for managing Emily's listing on Airbnb and handling all guest communications and issues related to the apartment. However, Emily soon discovers that VRI has changed her listing description, pricing, and house rules without her consent or knowledge. VRI is also not responsive to guest inquiries and complaints, which leads to a significant decline in Emily's reputation and ratings.

When Emily tries to contact Airbnb about this issue, she is told that the company is no longer responsible for managing her listing and that she needs to deal directly with VRI. However, Emily had specifically signed up with Airbnb because of its reputation and service quality, not VRI. This situation leaves Emily in a difficult position, as she has lost control over her own listing and is now at the mercy of a new company that she did not choose to work with. The Assignment Clause in the Host Damage Protection Terms allows Airbnb to pass off its responsibilities to hosts like Emily without any regard for their interests or well-being.

Honorable mentions:

VI. Modification or Termination of Host Damage Protection Terms

To the extent permissible by applicable law in your jurisdiction, Airbnb reserves the right to modify or terminate these Host Damage Protection Terms, at any time, in its sole discretion.

This mean at ANY time AirCover can be revoked and for whatever reason.

Lastly, if you go through and read more of the fine print you see that:

Host Damage Protection is not an insurance policy. To the extent you desire protection beyond Host Damage Protection, Airbnb strongly encourages you to purchase insurance that will cover you and your property for losses caused by Guests or Guests’ invitees in the event your loss is not an Eligible Loss within these Host Damage Protection Terms.

Need I say more? We all hope that we don't find ourselves in a situation where we are being denied by Airbnb.  But the reality is Airbnb holds all the cards and you as a host bare all of the cost. Shouldn't we as host keep more of what we earn instead of having to kick over 10% - 15% over to Airbnb in light of these policies?  This is why it's more important than ever to wake up and start booking directly with guests.