Home-Sharing Insurance: In Time for Canada's 150th Anniversary

Last Updated:
March 22, 2019
Karen Spencer
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In today's technologically advanced world, individuals have a unique opportunity to efficiently rent out their homes, spare bedrooms, or other accommodations through home-sharing applications, such as Airbnb.

Despite its convenience and the potential for profit, Airbnb is not without its risks for those who decide to list accommodations.

If you are considering renting your property through Airbnb, your first step should be to contact your insurance broker to review your current homeowners or renters insurance policy. Relying strictly on such policies while hosting guests through Airbnb can lead to significant gaps in coverage and leave you financially vulnerable.

While your homeowners or renters policy may allow you to rent your property to a guest, it is important to keep in mind that each insurer has its own restrictions and requirements. For example, some insurers may require advanced notice of any short-term rental, whereas others might insist that you purchase an endorsement to broaden your coverage.

Standard homeowners and renters insurance policies are designed for personal risks, not commercial use. If you plan to rent out your residence on a regular basis, many insurance companies will consider this commercial use. In many cases, regular Airbnb hosts will need to obtain a commercial insurance policy in order to be properly insured.

It should be noted that a growing number of insurance companies now offer home-sharing liability insurance policies that can be purchased on a month-to-month basis.

Even more alarming, your homeowners or renters policy most likely won't consider property damage caused by guests a covered peril. This means you could be left to cover the cost.

To its credit, Airbnb does offer its hosts two forms of protection through its Host Guarantee and Host Protection Insurance. While hosts may be inclined to rely exclusively on these programs to manage their risks, there are significant gaps related to these offerings.

Despite Airbnb's claims, hosts should be wary of relying solely on this insurance program for a number of reasons:

  • Intentional acts that aren't the result of an accident are not covered under this policy. In addition, Airbnb's Host Protection Insurance does not cover what it refers to as property issues, which can include things like mould, asbestos, and bedbugs.
  • Neither Airbnb's Host Protection Insurance nor its fine print is readily available for review. What's more, the policy is subject to limitations, conditions, and exclusions. Together, this means that specifics around coverages are vague, and Airbnb hosts may not know what's protected.
  • The personal property of any guest is generally not covered. Additionally, any theft or damage caused by a guest may not be covered either.

For full protection, it is likely that you will need to speak with an insurance professional to better understand the policy adjustments you will need in order to be fully covered.

To discuss your options, contact me today at kspencer@scrivens.ca.