Coverage 101 | Getting insurance for your Airbnb in Canada
Vacations are no longer the exclusive domain of multi-story hotel chains. That is to say, Airbnb, Vrbo, Guesty and self-service online BnB accommodations are not going away. Whether you are a homeowner looking to rent out a room, a property owner wanting to generate extra income or cottage owners seeking renters, getting insurance for your B&B is essential.
However, the risks you experience as a B&B manager are far from traditional. Especially in today’s climate of virtual BnB rentals. Chances are you may not meet and greet your guests in person. And this is just one element of risk exposure that you need to manage.
There are risks and there are rewards to renting out a BnB property. Likewise, there are coverages and exposures that that need to be managed. In short, these are the reasons why we’ve compiled some current insights about getting BnB insurance in Canada. After that, we’ll tell you about how we’re making it simple and easy to get the coverage you need.
Keep reading to learn more…
Firstly, can you run an Airbnb in your property
It’s a good question. And for Vancouver strata unit owners, it’s a question that’s before the courts right now. A Canadian Underwriter article notes, “Insurers caution their customers to check with their insurance providers first, before participating in short-term rentals, lest neither the policyholder nor the guest are covered under a strata policy.”1
This is because, “Two recent cases in Vancouver suggest that condo bylaws will ultimately determine whether or not strata owners can rent out their units through Airbnb.”2
To sum up, it’s important to know what you can and cannot do with your property. This is just one of many steps to consider when you are looking at renting out your property using an online service.
Above all, our brokers are commercial insurance experts. They can answer your questions and get you the coverage your short term rental needs. We take pride in helping our clients get aligned with value and insurance options.
Contact us to get more info about Airbnb insurance and coverage options.
Secondly – short term rentals “gone wild” and risks you need to be aware of…
New homeowners in Calgary decided to use an online short-term rental service to earn a few extra dollars. So…what happened after the short-term rental owners left their property?
“Within hours of their departure, the Starks heard from neighbours that busloads of people had begun showing up at their home. What ensued was a two-day party that police later described as a “drug-induced orgy.” The worst part was that even though they knew what was going on, the Starks couldn’t kick their guests out until the end of the rental term—because the guests were protected under contractual law. The final tab for clean-up of the damage topped $70,000, including a police-ordered hazardous materials crew.”3
And even worse than property damage. In Toronto, deadly violence is happening at bnb’s. In early 2020, the Toronto Sun reports, “The condo on the 32nd floor of a Queens Wharf development where four men were shot — three of them killed — late Friday is exactly the type of “ghost hotel” property that City Hall and activists groups (such as Fairbnb) have been trying to stamp out.”4
The scary part is that even if you rent your house for just one day, you’ve changed the terms of your property owners insurance. This means that if you don’t disclose current material facts – such as how you are using your home to your insurance company, you’re in breach of contract.
If you fail to advise your insurer of generating income with your property, the insurance company may:
- “ask that you add this coverage and pay the appropriate premium;
- decide not to renew your home insurance contract;
- cancel your policy.”5
A failure to inform can have serious financial consequences. According to MoneySense, the consequences of such will depend on the province in which you reside.
Furthermore, “If you receive a cancellation notice, you’ll probably have trouble finding coverage from other standard insurance carriers, and will have to pay more for coverage through the “non-standard” insurance market, where premiums can easily jump by 10% to 50% more than what you originally paid for coverage. For those living in Ontario, where the median annual house insurance premium is $1,284, according to a 2018 study by JD Power, this could mean forking out an additional $642 per year on homeowners’ insurance.”6
Air BnB Risks
Using Airbnb? While there is some coverage as part of Airbnb’s host protection program, it doesn’t cover everything. It does cover “hosts if they have legal liability for bodily injury or damage to guest belongings and the Host Guarantee, which covers up to $1 million US in property damage to the host’s belongings.”7
However, a CBC.ca news article notes, “there are some things that are not covered. At the end of the terms and conditions it says, ‘The Airbnb Host Guarantee is not an insurance policy. To the extent you desire protection beyond the Airbnb Host Guarantee, Airbnb strongly encourages you to purchase insurance that will cover you and your property for losses caused by guests or guests’ invitees in the event your loss is not within the terms of the Airbnb Host Guarantee.’”8
Furthermore, “VRBO and Home Away, which are owned by the same company, provide $1 million in liability insurance that may cover instances of bodily harm to the guest and damages to the property of a third party. That program also has exceptions.”9
Getting short term rental / Airbnb insurance aligned is easy with us!
In conclusion, our ALIGNED Insurance brokers across Canada are here to help you get the best value for your short term rental insurance. Meanwhile, here are some questions you can expect when you are completing a seasonal / short term rented dwelling coverage application.
For example:
- Your mailing address?
- How many weeks will the premises be rented?
- Do you occupy your premises? If so, how often?
- Is your rental property visited at least once every 7 days?
- What prior insurance do you have in place?
- Are you including use of watercraft or recreational equipment with your rental?
- Is the watercraft motorized or un-motorized?
- Do you have a fire hydrant within 300 metres?
- Do you have a firehall within 8 kilometres? Is it a volunteer firehall?
- Is there a minimum of one smoke detector per floor?
- Information about the contents of your short-term rental unit?
- Details about any past property insurance claims?
- How do you secure tenants and screen them?
- If you live more than 100 kilometres away, who is responsible for maintenance, key change over and cleaning?
Source(s): 1,2 CanadianUnderwriter.ca: Why this strata’s bylaws on Airbnb were deemed unenforceable ; 3,5,6 MoneySense.ca: What to do if short-term renters trash your home ; 4 TorontoSun.com: Gun violence all too common at Airbnb rental properties ; 7,8,9 CBC.ca: If you’re renting out on Airbnb, you should check your insurance ;
