Washington Commissioner Fines Airbnb for Acting as Unauthorized Insurer

Washington Insurance Commissioner Mike Kreidler fined Airbnb $20,000 for acting as an unauthorized insurer in the state.

Kreidler also ordered the vacation rental company to obtain a surplus lines insurance policy to continue offering its Host Damage Protection program in Washington.

The order requires Airbnb to pay the fine by June 5, and it must secure a surplus lines policy through a broker licensed in Washington by Aug. 5.

Kreidler’s office opened its investigation based on the HDP program, which advertised $1 million in coverage for damages caused by a guest. It was included with bookings as part of the company’s AirCover program, provided under a general liability policy with hosts covered as insureds.

As part of the order, Airbnb must review all previously denied HDP claims filed by hosts with properties in Washington since Jan. 1, 2021, and it must pay out any covered costs that were deemed to be improperly denied. All claim coverage and amounts paid out to Airbnb hosts will be determined by an insurance adjuster licensed in Washington state going forward, according to the order.

Between Jan. 1, 2019 and March 23, 2022, hosts in Washington submitted nearly 13,000 reimbursement requests, with 5,525 of those made directly to Airbnb. The company paid 3,565 of those claims for a total of just over $2.3 million, according to Kreidler’s office.

As of January 25, 2022, Airbnb had 15,160 hosts listed in Washington, the office reported.

Airbnb issued a statement saying Airbnb’s HDP program is a guarantee of a guest’s obligation to pay for damages to a host’s listing and “not an insurance policy.”

“That said, we have reached agreement with Commissioner Kreidler’s office to ensure that Airbnb can continue to maintain protection from the rare instances of guest-caused property damage for Hosts of our Washington State listings for free on every reservation,” the statement continues. “We will soon convert our host damage protection program to be underwritten by a licensed insurer, which will take effect for any new bookings in Washington State. We anticipate this will have no impact on the Hosts of our Washington State listings — they will receive the same protection as they did previously.”

Since 2001, Kreidler has assessed more than $38 million in fines, which are directed to the state’s general fund to pay for state services.

Topics Carriers Washington