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Airbnb and Home-Sharing Insurance: What You Should Know

Home Insurance

By Joanne Lemna | February 2, 2017

Airbnb and other home-sharing companies have become an increasingly popular option for Canadians. Hosts enjoy the additional income while guests appreciate the variety of units, amenities, locations and prices. While this arrangement is largely a positive one for guests and hosts alike, there are always exceptions.

Such was the case in Calgary Alberta in April 2015 when owners returned to a destroyed home after renting it out to four adults via Airbnb. Their guests had thrown a huge party and trashed the place, resulting in an estimated $150,000 in damages. Luckily, Airbnb stepped in to assist these owners through their Host Guarantee insurance which provides up to $1,000,000 to cover guest-induced damages.

According to Airbnb, this Host Guarantee is “designed to protect hosts in the rare instance of property damage to their own possessions by a guest staying in the space. The Host Guarantee is not insurance and doesn’t replace your homeowner’s or renter’s insurance.”

This means that only damage directly caused by a guest is covered. There is no liability coverage compensation for theft and it doesn’t cover damages to everything.

Airbnb also offers Host Protection Insurance but this only covers up to $1,000,000 in liability insurance if a guest is injured in your unit during their stay. This means that all other liability cases will not be covered.

While Airbnb offers basic protection, there is still a lot a host will be on the hook for should something go wrong. For example, if someone steals something from your home, causes harm to a pet or damages a shared area, the host will have to cover all expenses.

You will also be paying for costs associated with all liability claims not including injury. And regardless of the cause of damage, you will receive no compensation for your loss of income while you repair your home or apartment.

So what about your regular home insurance?  Are you covered?

Steve Kee of the Insurance Bureau of Canada advises that hosts need to “check with your insurance representative to find out what you’re covered for and what some of the risks may be.” Coverage will vary from policy to policy as well as from company to company. Discussing your options with an independent insurance broker can help you find the best option for you.

One insurance company Aviva has rolled out specific home-sharing insurance endorsement. Available February 1, 2017, across Canada, this coverage includes the following:

  • Fair rental value (compensation for loss of rental income)
  • Loss or damage to personal belongings or the buildings
  • Up to $1500 of a guest’s lost or damaged property
  • Liability arising with a short-term rental
  • Intentional acts criminal acts or failure to act by a guest

You can choose from three options for how frequently you rent out your home via a home-sharing platform:

  1. Rent your entire home up to 90 days each year.
  2. Rent your entire home up to 180 days each year.
  3. Rent a portion of your home any amount of time each year.
  4. Rent an income property any amount of time each year (this is a separate, standalone home insurance policy, not an endorsement).

Other insurers are beginning to offer standalone rental income insurance policies designed for home-sharing or are offering endorsements to existing home insurance policies.

Regardless, if you list your home or a portion of your home on a home-sharing platform, you must inform your home insurance provider. Failure to do so could void your policy and lead to a denied claim.

If you’re interested in home-sharing, you should speak to your broker about the insurance implications and options for protecting your investment. You don’t want to be on the hook for damages or lost income when you don’t have to be.

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