Right after the renters left to go on a hike, the multistory house with breathtaking mountain views burned down and the distraught owner, mourning the sad remains of his nearly $1 million investment, placed a call to Airbnb, expecting the company’s insurance coverage to kick in and soften the blow.
Uh, no.
The San Francisco-based rental giant took a good, long look at Nicholas Libertin’s situation. Then it told him the damage to his spacious cabin overlooking Georgia’s Blue Ridge Mountains wasn’t covered by the insurance that Airbnb touts as a protection for owners whose “guests” damage their property during official stays arranged through Airbnb — because the cause of the Libertin blaze was undetermined.
That answer was both disappointing and somewhat surprising, said Libertin. “If you don’t have unequivocal proof of the cause, I don’t think they’ll cover it.”
Many Georgia homeowners, like Libertin, rent out their properties for vacation stays as a source of extra income. But the denied claim for Libertin’s mountain retreat raises questions about insurance protections owners have — and gaps in polices — should the cause of damage to a property not be clear-cut.
Credit: Courtesy photo
Credit: Courtesy photo
Airbnb declined to comment on Libertin’s claims, referring a reporter’s inquiry to webpages describing its policies for owners.
Airbnb is big business, with 7.7 million listings worldwide. About 1.5 billion renters have passed through its listings since its 2007 inception, according to the company. Thousands of them have come through Georgia, generating $600 million in income to owners last year alone, the company says.
For Libertin, those renters last year meant income of $98,356. An emergency room physician, he and his wife Monica, a physical therapist, live just west of Cleveland, Ohio. Because they have friends in Atlanta and love the Georgia mountains, buying the Blue Ridge home would be a vacation retreat and possibly something to leave for their children. But he said he didn’t think they could afford to carry the mortgage without renting out the cabin much of the time.
So they listed it on several online sites, including Airbnb, generally charging between $200 and $500 a day.
Libertin did have a primary homeowner’s insurance policy with Proper Insurance that covered the Blue Ridge house. After the fire, that policy paid him $755,500, covering a portion of the home’s value, furnishings, cleanup and lost revenue. But that falls short of the fire’s total cost, which, by Libertin’s calculation, was $1,286,697.
That includes rebuilding — he’s had estimates ranging from $882,000 to $1.3 million. It includes the lost revenue, assuming he’d make about the same rental income as last year. And it includes furnishings not covered by Proper.
So, subtracting the Proper payment, he figures he’s in the hole for $531,196, which he had hoped and expected to recoup from the Airbnb coverage.
“This is the worst-case scenario despite us being ‘properly’ insured,” he said. Airbnb does advertise what it calls AirCover for Hosts, which “reimburses hosts up to $3 million in the rare event your place or belongings are damaged by a guest during an Airbnb stay.”
But that’s the question: In the case of the Blue Ridge fire, was it certain that the renters were responsible?
The renters had used the home’s fireplaces during their stay, but said all the fires were long out when they left for a hike about 11 a.m. on Jan. 4, according to the Fire Analysis Report prepared by Kenneth Wright for Proper Insurance. Right before they left, the report said, one of their children was playing with ashes from a wood-burning stone fireplace at the base of an outdoor chimney in the rear of the three-bedroom, 3,480-square-foot home.
Credit: cus
Credit: cus
A few hours later — at 2 p.m. — a surveyor working about a half-mile away saw what he thought were sparks from an upstairs window, then smoke and then flames. Before long, the home was engulfed in flames.
In Wright’s March 3 report, he discounted electrical or gas problems as an explanation, and concluded that the fire started in the house’s rear, the location of an outdoor fireplace. He noted that the fireplace had a screen intended to keep ashes from escaping. “If the screen were not replaced or if the child was playing with the ashes, ashes could easily have been blown from the fireplace and ignited combustibles on the deck or the ground area below,” he wrote.
But coincidence is not proof. And he couldn’t say for sure whether the fire started inside the house or outside.
Moreover, the renters when contacted later said the ashes were cool to the touch by the time the child played with them, he wrote. Pinning down a cause was especially tough when the destruction was near-total by the time firefighters from the Fannin County Fire Department arrived at 3:21 p.m., the analyst wrote.
The renters, who had to planned to stay several more days, told analyst Wright that after learning the house had burned, destroying all their belongings, they turned toward home and did not return.
The Atlanta Journal-Constitution attempted to reach the renters by phone and social media, but they did not immediately return messages.
On April 23, a company official wrote to Libertin.
In her letter, Airbnb’s representative acknowledged that the Proper analyst’s report “suggests” that the fire started in the back of the house. On the other hand, she wrote, the Fannin County’s fire investigator said the area where the fire started was “undetermined.”
The state’s fire marshal was also unable to determine a cause, according to the Georgia Office of Commissioner and Insurance Safety Fire.
Without a decisive judgment pegging the renters’ responsibility, Airbnb coverage simply wasn’t triggered, she wrote.
“Based on these experts’ investigation of the fire’s origin and cause, and the lack of any other credible information available to support the guest having caused the fire, we are unfortunately unable to find your request eligible for reimbursement under Host Damage Protection,” the Airbnb official wrote.
Meanwhile, Libertin was spending on the cleanup.
“It took Airbnb four months to give us that letter and it was very hard to get ahold of them,” he said. “And during that time, we were just hemorrhaging money.”
Airbnb, which typically takes 15% of the renters’ payment, had revenues of $2.1 billion last year. The company and the industry have not been without controversy. Critics — usually looking at it from the consumer side — say short-term rentals siphon off needed housing stock, offers sketchy, sometimes unsafe accommodations and has been used as a mask for corporate owners that may rent out whole buildings.
“Airbnb is to travel what Facebook is to the internet,” wrote financial adviser site NerdWallet. “In a word: terrible.”
A number of cities have tried to rein in short-term rentals or even ban the practice. In New York City, the law requires owners to register with the city government, and has caps on the number of guests. Dallas has limited rentals to specific neighborhoods.
Atlanta passed an ordinance in 2022 that required owners to be city residents and to obtain a permit, although enforcement of the rule has been frequently delayed.
Without commenting on Libertin’s situation, Robert Passmore, a vice president at the American Property Casualty Insurance Association, advised caution for owners using Airbnb and other platforms to rent.
An owner should have their own homeowners insurance coverage on the home, he said.
“If you sign up for a platform, you should ask and make sure you understand the platform’s coverage and when it kicks in,” Passmore said. “Be sure to scour the hosting platform’s FAQ or info for hosts … Make sure you understand what insurance coverage they provide.”
Libertin’s tussle with Airbnb is not over. He has sent a letter requesting “amicable resolution.” If — as he expects — they say “no” to that, he can ask for the dispute to be taken to a neutral arbitrator.
If Libertin comes up empty, he has an attorney and will consider a lawsuit, but that’s no sure thing — and it’s expensive, he says. He feels he has to try to rebuild the house.
“The implications of our story extend beyond personal loss,” Libertin said. “They highlight critical concerns regarding the responsibilities and protections — or the lack thereof — for homeowners hosting through platforms like Airbnb.”
Insurance advice for owners of vacation properties rented online
Homeowners should:
— Have your own homeowners insurance coverage to protect your home
— Understand what coverage is available from the hosting platform you are working with.
— Ask and make sure you understand the platform’s coverage and when it kicks in.
— Scour the hosting platform’s FAQs for information. Use their chat feature if need be to make sure you understand what coverage they provide.
— Talk to your own insurance carrier to see how they’d handle a dispute with Airbnb. You want them to back you up.
Source: American Property Casualty Insurance Association
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