A guest tried to fry a turkey in my kitchen and burned the cabinets, the floor, and the ceiling. The total repair bill is $85,000. AirCover is offering $40,000 because they are applying “depreciation” to my 10-year-old kitchen. My house is uninhabitable, and I’m learning the hard way about “Actual Cash Value.”
Key Takeaways
- ACV vs. RCV: “Actual Cash Value” (ACV) gives you the value of your used cabinets. “Replacement Cost Value” (RCV) gives you the money to buy new ones. AirCover often defaults to ACV.
- Loss of Income Duration: A fire claim takes 6-12 months to fix. Ensure your “Loss of Income” coverage lasts at least 12 months, not just “fair rental value” for 3 months.
- Code Upgrades: 2026 building codes are stricter. If you have to rewire the whole house because of one burnt wall, you need “Ordinance or Law” coverage.
- The “Hostile Fire” Requirement: Standard policies cover fire, but if they view it as a “business operation” risk you didn’t disclose, they deny it all.
The “Why” (The Trap)
The trap is Depreciation.
Insurance adjusters have software that says your kitchen cabinets have a “useful life” of 20 years. If they are 10 years old, the insurer deducts 50% of the claim value. You get a check for half the cost of the repair.
AirCover’s “Host Damage Protection” is technically not insurance, and their terms allow them to determine “value” at their discretion, which often means heavy depreciation.
The Investigation: I Called Them
- Proper Insurance: They offer Replacement Cost on both the building and the contents (furniture). This is vital. If the couch burns, you get a new couch.
- Airbnb AirCover: User reports and terms indicate they lean heavily on ACV. For large claims, they hire third-party adjusters who are incentivized to lower the payout.
- State Farm: If you have the right landlord policy, they usually offer Replacement Cost on the structure, but often ACV on contents (appliances/furniture) unless endorsed.
Comparison Table: Fire Claim Valuation
| Feature | Proper Insurance | Airbnb AirCover | Standard Landlord (DP-3) |
| Structure Valuation | Replacement Cost | Varies (often ACV/Depreciated) | Replacement Cost (usually) |
| Contents Valuation | Replacement Cost | Actual Cash Value | Actual Cash Value (often) |
| Ordinance or Law | YES (Code upgrades) | NO | Optional Endorsement |
| Loss of Income | Actual Loss Sustained | Limited | Fair Rental Value |
[IMAGE: Photo of a scorched kitchen with a clipboard in the foreground showing specific depreciation calculations]
Step-by-Step Action Plan
- Verify “Replacement Cost” on Contents: Check your policy. If it says “Personal Property: ACV,” change it to “Replacement Cost” immediately.
- Add “Ordinance or Law”: This pays for code upgrades (e.g., sprinklers, hardwired smoke detectors) required during the rebuild.
- Fire Extinguishers: Put one in the kitchen and one on every floor. It’s a cheap way to show “duty of care.”
- Smart Smoke Detectors: Use Nest or Roost batteries. They alert your phone so you can call 911 if the guest isn’t home.
FAQ
Will AirCover pay if the guest was drunk?
Yes, usually. Negligence (even drunk negligence) is generally covered. Intentional arson is different.
Does my policy cover the guest’s burnt belongings?
No. Your insurance covers your house. The guest needs their own travel insurance or renters insurance for their laptop/clothes.
Who pays the deductible?
You pay your deductible. AirCover doesn’t technically have a deductible, but they might deduct value elsewhere. You can try to charge the guest, but good luck.