Virginia Bureau of Insurance Raises Concerns Over Airbnb's Host Damage Protection Program
The Virginia Bureau of Insurance has raised concerns regarding Airbnb's Host Damage Protection (HDP) program, asserting its classification as an insurance product and highlighting Airbnb's operation without the necessary licensing. The Virginia State Corporation Commission has set a crucial deadline of July 31, 2026, for Airbnb to negotiate a settlement or face a hearing on December 14, 2026.
Airbnb disputes Virginia’s classification of HDP as insurance. In a statement to the Insurance Journal, Airbnb claimed, "The Bureau of Insurance has mischaracterized Airbnb’s Host Damage Protection program. The program is lawful and is not – and has never been – insurance." Airbnb affirms its commitment to defending its stance and plans to respond diligently.
Previously, the state of Washington raised similar concerns, with Airbnb maintaining that HDP functions as a guarantee rather than insurance, supported by its online terms. The HDP program is designed for Virginia property owners listing accommodations on the platform, offering indemnity up to $3 million for damages and losses caused by guests. Compensation under HDP is contingent upon a guest's failure to address these losses.
The Virginia insurance regulator contends that Airbnb has violated state insurance codes by offering HDP without the requisite licensing or certificate of authority. Unlike Airbnb's $1 million Host Liability Insurance, underwritten by a licensed insurer, HDP is managed by Airbnb, taking on all related risk management responsibilities.
The Bureau argues that HDP meets the criteria of an insurance product as Airbnb is contractually responsible for indemnifying hosts up to $3 million, thereby assuming financial risk. Furthermore, Airbnb's control over the claims process, including claim submissions and reimbursement decisions, mirrors the roles of an insurer and adjuster.
Virginia regulators are demanding that Airbnb suspend HDP offerings until they secure an insurer's license or partner with an authorized carrier. Following similar issues, Washington in 2023 required Airbnb to procure a surplus lines policy, imposed a $20,000 fine, and mandated a review process by licensed adjusters.
Airbnb's terms state that HDP is not insurance and does not replace standard homeowners' insurance policies, which generally exclude short-term rental coverage. Airbnb recommends property owners seeking additional protection to consider procuring their own insurance. Furthermore, Airbnb launched Earnings Protection, an insurance product offered by MIC Global, providing income protection against disruptions like severe weather or property damage.