HomeHome InsuranceWhy your homeowner insurance may not cover your short-term rental

Why your homeowner insurance may not cover your short-term rental

Insurance providers are warning anyone operating a short-term rental or thinking of getting in the business, to check their coverage.

“Just make sure you call your insurance provider because you are changing the risk,” said David McInnis, of Peake & McInnis Insurance on P.E.I.

“If you’ve insured a home as a private dwelling and you’re going to, you know, offer some rooms on Airbnb, you’re changing the risk profile and that affects how the thing is underwritten.”

McInnis said his office has been getting more calls lately from customers inquiring what would happen to their insurance if they were to rent out their home, which he said can differ depending on how you are renting as well as how often you are renting.

“If you have a single-family home and you go rent one room it would be different than if you had an entire apartment building.”

CBC spoke to several insurance providers on the Island and they all had a similar message, but each had a different options to deal with the rentals.

Steve Bruce/CBC

Steve Bruce/CBC

The Co-operators General Insurance Company has created its own line of insurance to cover homeowners for short-term rentals. Called Duuo, it’s an on-demand product that may be able to be added to your homeowner policy for the days that you are renting.

“We saw a net need in the Canadian marketplace for Canadians that wanted to participate with hosting their homes on a casual basis not having the right insurance protection in place,” said Robin Shufelt, managing director of Duuo.

Industry catching up

The Insurance Bureau of Canada said many brokers have already started to develop add-on products to help cover off short-term rentals.

“The insurance industry has caught up very quickly with the advent of Airbnb and recognize fully that not everyone who offers their home to visitors through AirBnb is doing so 365 days a year,” said Amanda Dean, vice-president Atlantic for the Insurance Bureau of Canada.

“People may opt to do it for a couple of months of the year, so a full commercial policy may not be what is needed,” she said.

She suggests talking to your provider or shopping around to fit your needs.

Hosting sites’ insurance

Some hosting sites offer insurance when you list your home with them. Airbnb has two products, both are free and automatically kick in when you have a booking.

The Host Protection Insurance Program, which covers 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.

But 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.”

Insurance policies don’t expect homeowners to allow complete strangers to stay in their home without them being present. – Amanda Dean, Insurance Bureau of Canada

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.

Dean said the bottom line is call your own home insurance provider.

“The vast majority of property insurance policies don’t expect homeowners to allow complete strangers to stay in their home without them being present … but that coverage and those rules can cease to apply the moment that the homeowner vacates the premises and leave it in the hands of others.”

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