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Comment by breck | Hacker News Reader

At the least, I hope someone starts a fund for this girl. I'd contribute. This is a terrible story.

Makes me think— Who says someone else has to insure Airbnb? Let's say they add an invisible $1 insurance fee to each booking, that goes into a fund to pay interim damages only when an actual crime is committed.

Cases like this are so rare, and although the damage is horrific to one person the dollar amount is trivial on the scale Airbnb operates. Seems like a perfect case for a shared risk pool that actually works rather than insurance.

Then they could peg the cost of the insurance fee at a realistic share of your risk, and the theoretical cost of someone trashing the place would be built into the cost of the room.

This opens Airbnb up to the risk of significant insurance fraud. Insurance companies have the infrastructure to deal with it, but Airbnb doesn't - and presumably doesn't want to build it.

If the premiums were juicy enough, an existing insurance company could cobrand with them to offer it. They can also limit their liability with a cap on the damages covered.

This is precisely what insurance companies are for. Airbnb gets insured, it's customers file claims with Airbnbs insurer when things go sour.

Insurance fraud is no joke and it takes a hell of a lot of stupidness to attempt it.

The problem is, as other commenters have pointed out, the activity facilitated by Airbnb is illegal in an increasing number of states. I'm sure that complicates insurance.

Their attack surface is way, way lower, though. Airbnb would only be insuring the contract between two parties that Airbnb knows, so they're lightyears ahead of homeowner's insurance when it comes to recovering money from a claim.

Fraud would mean the owner having an accomplice renter who destroyed something, Airbnb compensating the owner, and then being unable to track down the accomplice for redress. That's only a problem if a significant number of renters are able to use Airbnb without Airbnb having any way to track them down.

And if that's the case, they already have a problem.

An accomplice renter - or destruction or property - isn't necessary. The owner can just claim theft, at which point it's their word against the renter - "They stole my HDTV!" "There was no HDTV to start with!"

At that point Airbnb is put in an impossible situation - they either pay for what may be fraud, or they refuse to compensate what may be actual theft.

Simply integrate this with a rating or flagging feature. Make it strict -- one 'dispute', such as this, and you're on watch. Two in a short time frame and you're banned. etc. They can afford to pay for a couple of HDTVs so a couple of smart guys can profit off the service, and the legitimate users can keep on legitimately using.

I don't get it. They require you to file a police report, just like insurance companies do. In fact, since they know the identity of the renter, they can require that the renter's name appears in the police report, and Airbnb can call the police station themselves to follow up with more information. A claim against the fund necessarily means pressing criminal charges against another individual.

So as the owner, it's my word against the renter with the cops involved. They're going to figure it out eventually. Maybe I'd be able to float a few grand for a while before it caught up with me, but surely there are easier ways for me to turn false testimony to my advantage than screwing over the web site that's earning me money?

I'll freely admit I don't know that much about insurance fraud. But I suspect the majority of people attempting fraud wouldn't be loyal Airbnb customers, but rather people of questionable ethics who hear that if you go to such-and-such website, and file a claim, you may end up getting some money. If there's any weakness in Airbnb's insurance system, given the scale at which Airbnb wants to operate, people WILL find and exploit it.

It is, of course, very possible to set up insurance so it has few loopholes - insurance companies do it! My point is simply that it's not trivial, and Airbnb would have to invest significant resources to make it work well - while still potentially failing to gain the goodwill they need (few people actually LIKE insurance companies).

I would kickstart a little for this.

I remember I had difficulty contributing to Kickstart since I'm in the Netherlands.

Is there someone here that can set up a Paypal account for this gal? I'd happily donate a few $.

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