Insurers can spread their risk along multiple insurance lines.
If you're Airbnb, you're exposed to one type of risk: houses getting damaged. If you're Lloyds/GEICO, you're spread out over health risks, housing risk, car risk, maybe some financial assets risk etc
Could you clarify what you mean here? I'm not sure I follow.
Say someone rents an AirBNB and absolutely trash the house, racking up thousands or tens of thousands of dollars of damages. Or steals valuables that are in the house. Or on the flipside, perhaps the property has not been repaired and the Airbnb renter is injured on the property. Surely AirBNB would require insurance for such types of incidents.
Why would they not require insurance when they are in the business of rentals? Most jurisdictions would allow a property owner to include AirBNB in a lawsuit against a renter conducting criminal activity or a renter suffering damages from criminal negligence of the property owner.
To limit your downside. What AirBnB likely has is a high deductible policy. AirBNB pays for minor damages, but if the world goes on a AirBnB party rental spree Lloyds pays.
If you're Airbnb, you're exposed to one type of risk: houses getting damaged. If you're Lloyds/GEICO, you're spread out over health risks, housing risk, car risk, maybe some financial assets risk etc