Through Airbnb hosting, thousands of Canadians have either found a way to supplement their incomes or have found themselves a new business opportunity by investing in properties specifically for home sharing and short-term rentals. And it’s not just homeowners and real estate investors hosting on Airbnb, renters are also using the platform for short-term subletting or to rent out a spare room as an alternate revenue stream.
Hosting on Airbnb? Are You and Your Home Protected?
If you’re one of those Canadians hosting on Airbnb, you have probably looked into getting insurance with Airbnb for your space or, at the very least, are aware of the home insurance coverage you’re already getting from Airbnb. Protecting your residence from damage or theft is probably your number one concern. However, the legal and financial risks for you don’t end there. As the owner or lessee, you are also responsible for the safety of your guests, other residents and other property that may be damaged by your guests.
Insurance for Airbnb Canada does provide both damage protection and liability coverage known as “Host Guarantee Protection” and “Host Protection Insurance”. Both of these products offer some level of home insurance for you as a short term rental host. But there are limitations and some crucial exceptions with Airbnb Insurance Canada that do not fully protect hosts from legal liability or damage to their property. More on that below. Relying on a homeowner’s insurance policy to fill the gaps can still leave your host protection thin and, in fact, your home insurance company may nullify your coverage if you use your residence for Airbnb hosting depending on how often you rent it out.
Before Hosting on Airbnb, Read This!
Before deciding to host, you should consult your home insurance policy to find out exactly what it says about insurance for short-term rental. It may limit the number of term rentals you’re allowed. Your home insurance company may insist you get commercial insurance coverage as your home or renter’s insurance will not cover commercial activities. It’s also important to consult your city’s bylaws concerning short-term rentals to make sure you’re in compliance with them as Airbnb insists that hosts follow their local laws. Failure to do so could mean hefty fines from the city and that the little protection insurance policy Airbnb does provide might not be available if you need it. Finally, if your rental unit is in a condominium, you will have to check the condo board’s regulations as some have banned residents from renting out their units on home-sharing platforms like Airbnb.
Your Airbnb Insurance Should be Brokered by Business Insurance Company Experts
If you’ve gone through all the checks and are ready to rent out your home on Airbnb, there is one more thing you will need to do before getting into the home-sharing business – make sure that you and your home are fully protected with a comprehensive Airbnb Insurance package. As experts in commercial insurance products, the advocates at ALIGNED know the risks and liabilities you now face and can get you the exact coverage you need.
We’ve analyzed the two coverages provided by Airbnb and compared them with the service and coverage you get with an Airbnb Insurance plan through ALIGNED below.
The Airbnb Host Guarantee
According to the website:
“The Airbnb Host Guarantee provides protection for up to $1,000,000 USD to a host for damages to covered property in the rare event of guest damages above the security deposit or if no security deposit is in place.”
That sounds good but if you continue reading, they also state:
“The Host Guarantee Program doesn’t cover cash and securities, collectibles, rare artwork, jewellery, or pets”
This is the first example of an important coverage gap that would need to be addressed with an Airbnb Insurance plan, which can include content insurance for everything in your unit. The Host Guarantee also doesn’t cover loss or damage due to wear and tear. The Airbnb Insurance plan available through ALIGNED can cover your property in case of sewer backup and other perils. Contact us if you’d like more information.
When it comes to damage caused by guests, Airbnb’s policy is:
“Filing a host guarantee request doesn’t preclude a guest from financial responsibility for the damages claimed if Airbnb determines a guest was at fault.”
In other words, not only can Airbnb deny your claim under the Host Guarantee for deliberate acts of vandalism by a guest, but they can also deny your claim if they decide the guest was “at fault” which is open to interpretation and could possibly include non-deliberate acts as well.
If you do have a legitimate claim for damage, the process to make a claim under the Host Guarantee is not that straightforward. You have to document the damage which may include taking photos, finding receipts and getting estimates, then you have to contact the guest and ask to be reimbursed before making a claim with Airbnb – and you have to do it all within 14 days or before your next guest checks in, whichever is earlier. This does not leave you a lot of time and you may not notice the damage until after that time has expired.
A simple Google search will also tell you that getting reimbursed through the Host Guarantee has been a problem for many hosts on the platform. By contrast, purchasing Airbnb Insurance through a local broker not only ensures that your home and valuables are fully protected, but it also gives you the convenience of having a dedicated, local advocate to work with if you have a claim.
Finally, when it comes to the Host Guarantee, Airbnb themselves say:
“Airbnb’s Host Guarantee is not an insurance policy, and not all property damage caused by guests is within its terms. If you want more protection, you’re encouraged to purchase personal insurance that will cover property damage not protected by the Host Guarantee.”
Airbnb Host Protection Insurance
As mentioned above, as a host, you are legally liable for:
- Injuries that happen to your guests or others while on your property
- Injuries caused by your guests or others to a third party
- Property damage caused by your guests or others to other property
Airbnb’s Host Protection Insurance is designed to protect hosts from lawsuits claiming personal injury or property damage but, again, there are exceptions that leave out vital coverages. Those exceptions include:
- Injury or damage done intentionally or “not an accident”
- Lost income
- Property issues like mould, asbestos or bedbugs
We’ve all heard numerous stories in the news of injuries and property damage resulting from a party hosted by Airbnb guests or their invitees. And of course, there’s the infamous Toronto chair tossing incident that happened at an Airbnb and could have easily resulted in major property damage, severe injury or death. Thankfully nobody was hurt or killed but if someone had or if one of those chairs had caused a major car accident, the Airbnb host would not have been protected by Airbnb’s Host Protection Insurance.
Airbnb Insurance available through ALIGNED can provide the coverage that Host Protection Insurance does not, including deliberate acts and lost rental income.
Getting a Quote for Airbnb Insurance Can be Done in Minutes
You will need to know:
- The mailing address
- How often you host on Airbnb
- Information on the contents of your rental unit
- Any past property insurance claims
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