The $1-million “guarantee”, which is underwritten by Lloyds of London, will also allow Airbnb to go “upscale” as it looks beyond its roots in letting out spare rooms to properties which now include several English castles and Frank Sinatra’s former Palm Springs home.
Airbnb, the private home rentals website, is scaling up its ambitions with $1-million insurance protection for homeowners and plans to offer other experiences for travellers later this year.
The site, which was valued at $1.3-billion in a fundraising last summer, allows people to rent out their homes or spare rooms to friends of friends, through a Facebook integration, or strangers, who can be reviewed or rated through its site.
Soon after closing its blockbuster $112-million funding round, the young company suffered a high-profile setback in July when a blogger detailed how her home was "ransacked" by Airbnb customers.
Days later, Airbnb introduced a $50,000 guarantee to its hosts, insuring them against theft or vandalism. However, in the subsequent months, Airbnb's European rivals 9Flats and Wimdu have begun to offer their short-term landlords insurance worth 500,000 euros.
Brian Chesky, Airbnb's chief executive, said that upping protection for its customers to $1-million was "unmatched" in the industry but was also intended to attract new converts to its "peer-to-peer" rentals service.
"It's a new behaviour and Airbnb is a fairly new idea," Mr. Chesky told the Financial Times. "The expanding coverage was a way to offer more peace of mind to people who haven't yet made that leap."
Mr. Chesky would not disclose how many people had claimed on Airbnb's insurance but said it was "surprisingly few."
"On the one hand, people are not damaging homes," he said. "That being said, we felt there was a one-in-a-million kind of fear."
The $1-million "guarantee," which is underwritten by Lloyds of London, will also allow Airbnb to go "upscale" as it looks beyond its roots in letting out spare rooms to properties which now include several English castles and Frank Sinatra's former Palm Springs home.
Airbnb adds about 1,000 new home listings everyday, with 150,000 properties in total, and has seen the average number of nights booked every day double since the beginning of the year.
The San Francisco-based company has been expanding internationally, with New York and London its top cities for rentals. Earlier this year, Airbnb acquired Crashpadder, a smaller rival in London, to expand its capacity ahead of the Olympic Games.
With offices now established in São Paulo, Moscow and Hamburg, among others, Airbnb is now preparing to offer new services building on its principle of the "sharing economy," with some hosts already offering extras such as tours of their area or cycle hire.
"We spent a disproportionate amount of time building out internationally in the last nine months," Mr. Chesky said. "It's important now from a business perspective to build and engage a community in all these markets. Once those communities are engaged you could see us offer a broader variety of things."