As a homeowner, you would love supplementary income through platforms like Airbnb.
Before renting out your property or sharing your home on a short-term basis with travelers, you should learn about insurance for Airbnb units. Your property might have homeowner’s insurance, but does that cover accommodations on Airbnb?
It would be a logical decision to consult with the experts at your local insurance brokerage and find out whether or not your property insurance covers Airbnb stays. Check out https://www.surex.com/Insurance/home/Ontario to learn more about home insurance in Ontario.
Home sharing and your property insurance policy
The average homeowner’s insurance scheme typically covers repair damage costs to the property. This includes natural disasters like earthquakes, floods, or hurricanes. Also, these policies cover burglaries, fires, and property damage due to vandalism. Some policies offer personal liability protection, offering financial assistance if someone at your property sustains an injury.
However, when you list your home for sharing on Airbnb, you should be vigilant about the black-and-white norms of the insurers.
The Insurance Information Institute states that certain insurers might allow the hosts to use the same privileges of their homeowner’s coverage when renting out their properties. This will be applicable if you inform the insurer beforehand about the one-time event. Thus, some policies in Canada cover temporary rental spaces.
When renting out your habitable space becomes a more regular affair, most insurers would revise the premiums. They consider your visitors or tenants to involve more risk.
Source: graybealgroup.com
Home sharing as a business to generate income
When you list your property on Airbnb, you intend to generate regular income. Therefore, the property insurer would consider this to be a business activity. Now, ordinary homeowners’ policies do not entertain business activities on your premises. This requires you to get business or home insurance for Airbnb to cover your property.
Therefore, you need to pay an additional premium if you decide to rent out your property to visitors. This might be in addition to your landlord insurance, which covers your property as well as its contents. Such policies cover losses arising from wind or fire. However, you won’t find any reimbursement for natural wear and tear. Neither would you get any compensation in case your tenant’s personal property gets damaged?
Do you need home insurance for your Airbnb?
Even when you have a homeowners insurance policy, your insurer might refuse to provide coverage when you share your residence. For instance, one of your guests might accidentally damage your carpet or break a window. Since the damage gets inflicted on the property when you rent out your space, your insurer has the right to deny the claim if you file one.
So, insurance experts recommend listing your residential space as an income property. With some amendments or modifications in your home insurance policy, you can qualify for claims stemming from damages caused by your visitors.
Before you put your home on rent at Airbnb or any such platform, make sure to obtain multiple quotes from the leading property insurers in Canada. Reputed insurance experts can help you find the right policy, recommending affordable schemes.
While Airbnb provides some insurance security through additional charges and penalties for rowdy tenants, it makes sense to have additional coverage. So, before you list your property on Airbnb, consult your broker regarding how it might affect your premiums.
Source: getfloorspace.com
What about Airbnb’s Host Guarantee?
The Host Protection policy of Airbnb secures hosts from lawsuits when they file a claim for property damage or personal injury. However, you should be aware of the exceptions, like incidents that are not accidental. Also, there might be property issues like asbestos problems, bedbugs, and molds. Also, you need additional security for lost income when your space remains inhabitable.
According to Airbnb, their Host Guarantee doesn’t come under the category of property insurance. It warrants compensation for the damages that your guests might cause. Thus, it makes sense to have more protection in place.
Being the host, you would be responsible for the following:
- Any sort of injuries to the visitors while they are on your property.
- Injuries that your guests might inflict on a third party.
- Any damage to your property that rowdy guests might make.
Naturally, the compensation that Airbnb provides may not be adequate. So, hosts need to have the provision for additional insurance for Airbnb.
3 benefits of having additional insurance coverage for your Airbnb property
Considering the visible loopholes of Airbnb’s Host Guarantee, you should go for proper property insurance for the shared space. Here are some of the tactical benefits of having additional coverage for your Airbnb property.
Source: arcinsurance.ca
1. Host protection
Established property insurers would compensate you with adequate liability coverage in case of property damage or injuries inflicted by third parties. This might be your neighbours, guests, or the condo management. Unless you get your shared space repaired on time, it might lead to the loss of rental income.
2. Securing valuables
You need to secure your shared space from burglary, theft, or any accident. The Host Guarantee of Airbnb doesn’t cover rare art, jewelry, and other valuables. As a homeowner, you are responsible for having adequate coverage in place at your initiative.
3. Protecting your contents
What about the contents of your property? You might discover some items missing a couple of days after your visitor leaves your home. Also, you need to secure your shared property and its contents against natural disasters. This includes appliances, furniture, and other accessories. With comprehensive property insurance, you can secure the contents of your shared property at Airbnb.
Insurance for Airbnb Canada — Endnote
Whether you are letting or subletting your property, make sure to have adequate protection with insurance for Airbnb. A slight increment in monthly premiums won’t hurt your pockets, but expensive repairs or lawsuits will. This explains why most Airbnb hosts consult experienced insurance experts like insurance brokers and pay extra premiums for the additional protection of their shared space.
On the other hand, having security for your tenant’s belongings also gives you the liberty to hike the Airbnb rent! Altogether, you would be on the winning end when you shell out the extra premium.
