The Dangers of the Airbnb Experience
by David P. Lesch, Esq.
By now you’ve heard of Airbnb, the online house-sharing marketplace that connects people looking to rent their homes with people looking for non-hotel accommodations. With listings in over a 109 countries worldwide, Airbnb has an estimated worth of close to $30 billion.
According to Airbnb, the company provides “a trusted community market place for people to list, discover, and book unique accommodations around the world” Travelers pay a guest service fee of 6-12 percent on top of a reservation fee to cover services such as customer support and the host guarantee. Once a traveler pays, Airbnb holds the payment for 24 hours after check-in before releasing the funds to the host. Sounds perfect, doesn’t it? Unfortunately, booking through Airbnb has issues that both hosts and travelers should be aware of.
While both host and traveler can benefit from meeting new people from around the world, neither is prepared for a worst-case scenario or common pitfalls.
Worst-case scenarios
While Airbnb states on its website that “you’re unlikely to experience any issues with property damage”, many hosts have complained of returning to their homes only to find a shell of what had existed before allowing the use of their abode. Although, Airbnb provides “protection for up to $1,000,000 to a host for damages to covered property” there is always a chance that Airbnb’s policy will not cover you for damages, in the case of an accident.
Under the Airbnb policy, certain things are not covered, including “cash, rare artwork, jewelry and injury to pets.” This is all the more reason to invest in your own policy.
If the insurance company does disclaim, you’d be out of luck if you attempted to reclaim monies for damaged property. You may consider having your own homeowner’s renter’s insurance policy cover your guests or damage caused by guests. Call your insurance company and ask about coverage that includes commercial activity.
If neither policy seems to suffice, you should look into a type of insurance called “an umbrella policy.” An umbrella policy is named as such because they cover just about anything, including the possibility of a guest suing you because they were injured on your property.
Safety Information
Another tip hosts should consider is providing safety information for your guests, which should also include investing in a smoke detector, fire extinguisher and first-aid kits. This is because a traveler would be well in his/her rights to bring an action against the host for injuries they suffered that could very well have been avoided. As for the traveler, the old expression “buyer beware” certainly applies.
Make sure the property is as described.
The biggest concern for guests may be that the property does not match the description, or that the host is unresponsive to the needs of a guest. Both the host and the guest can help limit these risks by using certain features on the Airbnb website, which includes verifying IDs, profiles, reviews, messaging, and secure payment platforms.
Discrimination
Sadly, one of the biggest problems some travelers face is getting a host to rent to them. Many articles have been written concerning Airbnb’s enabling of their hosts’ racism. A recent study by Harvard Business School researchers found that Airbnb guests with distinctively African American names were 16 percent less likely to be booked than those with white sounding names.
Airbnb is only now attempting to address the problem. Last week, Airbnb took its most forceful action yet to combat discrimination. It told its hosts that they needed to agree to a “community commitment” non-discrimination policy beginning November 1.
How Airbnb will implement this plan remains unclear but it’s a step in the right direction. The most important thing to remember is that renting through Airbnb has its pitfalls. Before signing up for the service, both host and guests should be fully aware of all the issues which may arise when travelers trade-in the “cookie cutter hotel experience” for the house-sharing experience.
As with any contract, read the fine print and do your research before signing on the dotted line.
David P. Lesch is an attorney and host of ‘Today’s Verdict with David Lesch‘ on Bronxnet. Today”s Verdict airs Tuesday nights at 6:30pm, Cablevision channel 67, Fios channel 33. On Facebook and Twitter @DavidLesch.
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