Gotham Brokerage: Be Wary of Airbnb and Other Rental Services

Online lodging service is popular but owners and renters insurance won’t cover problems

Photo courtesy Cea/Creative Commons

Airbnb, the online lodging service that lets people rent out homes and rooms to travelers, seems like a great idea, and for a lot of people it apparently is. The three-year-old company claims customers have booked more than 2 million nights through the service, and that nearly everyone has walked away satisfied.

But you need to know the risks. If your short-term renter trashes your home, your home insurance policy — whether it’s a renter’s, condo, co-op or homeowner’s — won’t cover the damage. And we at Gotham Brokerage Co., Inc., have seen enough to know that no temporary living arrangement — especially with a stranger, no matter how solid a citizen he or she seems — is risk-free for an owner or renter looking to make a little extra money by renting out space.

In San Francisco, an Airbnb user came home from a week-long business trip to find that her guests had rifled through every cabinet, closet and door, taking electronics, personal items and private documents. The vandals had piled dirty dishes in the kitchen; left wet, used towels on the bathroom floor; and spread soot everywhere from a fireplace they’d used without opening the chimney flue.

“I have no faith anymore. I don’t trust anymore,” the woman wrote in her blog. “I don’t know if I ever will again.”

New York has taken some steps to help protect those who list space on such services, but it remains unclear how effective they will be. A new state law, passed last year, cracks down on so-called “illegal hotels” and adds a layer of risk for someone listing space on the service, though Airbnb says the law is meant to target unlicensed hotels and hostels, not Airbnb users.

Sad to say, but consumers need to remember a vital phrase, often rendered in its original Latin: Caveat emptor. Let the buyer beware. No matter how well-intentioned a company is, or how aggressive its attempts at security are, it simply cannot guarantee users will treat you or your home with respect. If you choose to use Airbnb or a similar service, and it works out, terrific. But understand that you’re rolling the dice.

Gotham Brokerage has written policies in New York City for more than 50 years, serving clients throughout the Tri-State area. As an insurance brokerage, we can assemble policies from a variety of A-rated companies, helping tailor coverage and keep costs down. We offer only replacement-value policies, insuring you recoup full value on lost, damaged or stolen goods.

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