The Real Deal New York

NY lawmakers question Airbnb’s “$1 million host guarantee”

Insurance promise may constitute deceptive business practice, letter charges

September 19, 2014 11:10AM

State Superintendent Benjamin Lawsky and a map of Airbnb rentals in New York City

State Superintendent Benjamin Lawsky and a map of Airbnb rentals in New York City

Airbnb is under fire for allegedly misleading insurance policies, with two New York lawmakers calling on State Superintendent Benjamin Lawsky to investigate.

In a letter to Lawsky, State Senator Adriano Espaillat and Assemblyman Francisco Moya questioned the legality of Airbnb’s so-called “$1 million host guarantee,” a policy that promises to reimburse hosts for any damages incurred by guests for up to $1 million. The guarantee, they argue, “may constitute a deceptive business practice in that it willfully misleads Airbnb hosts into believing they have sufficient coverage,” they wrote.

The policy that supposedly guarantees full coverage in fact only covers a handful of damages, the lawmakers said in their letter. The fine print on Airbnb’s website, meanwhile, “reveals that it only applies to property that is owned or legally controlled by the host,” the pair wrote, thus excluding a large chunk of New York City Airbnb users whose apartment leases prohibit nightly rentals.

The move follows New York Attorney General Eric Schneiderman’s subpoena demanding the records of more than 15,000 host users to determine whether the short-term rental site was in compliance with a law banning the use of apartments for transient hotel guests. Airbnb agreed to hand over the records with some personal info redacted. Airbnb has also been questioned on the tax front, with the company saying it would be willing to shell out more than $21 million per year in taxes in New York.

“First they said they don’t want us to pay taxes, and now they are after our million-dollar Host Guarantee, which is simply designed to give some peace of mind to our amazing community of people who open up their homes to travelers,” an Airbnb spokesperson told the Daily News. [NYDN]Julie Strickland

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