What sort of coverage is needed for Airbnb hosts?
As more and more people are opting to stay at Airbnb accommodations, instead of hotels to help save money while travelling, it is only natural that an increasing amount of homeowners are choosing to use their residences for short-term renter purposes. In 2016 Toronto saw roughly 10,000 listing for Airbnb accommodations, saving travelers money and putting cash in the pockets of the hosts, a seemingly win-win situation. However, as a host, letting a revolving door of strangers stay at your home or apartment for a brief period, poses major risks to your property. With the increased risk that playing host to those travelling presents, it is imperative to explore your options to see what sort of coverage is available to increase the protection of your property.
Airbnb Host Guarantee
Airbnb does offer their hosts some protection through their Host Guarantee program. Airbnb states that they will cover up to $1,000,000 (CAN) in damages, and that this protection comes at no extra cost to the host. Limitations and conditions apply to the coverage, and things such as cash and securities, pets, personal liability, and shared or common areas are not included in the coverage provided.
Airbnb stresses that the Host Guarantee is not an insurance policy and should not be considered as a replacement or stand-in for homeowners or renters insurance. They urge hosts to speak to their insurance providers to ensure that they are properly covered before renting out their space, and recommend seeking extra insurance for valuable goods such as jewelry, artwork, and collectables.
Insurance
A standard homeowners insurance policy will not cover the risk taken on by utilizing your living space as a short-term rental property, which leaves you, as an Airbnb host, in a precarious position. Insurance for short-term rentals is a relatively new trend in the market and many providers are still figure out how to get on board with it. While coverage pertaining to tenant insurance tends to be fairly attainable as it deals with long-term rentals, there is much more risk involved in insuring someone who rents out their space on a sort-term basis.
A few insurance providers have rolled out short-term rental coverage premiums that can be added on top of a customer’s already existing homeowners insurance. Some may endorse coverage for those renting the space for up to 30 days of the year, 60 days, 90 days, ect. The higher number of days that are covered however, the more expensive the cost of the premium becomes. Others may have a program in place that enables them to provide limited dedicated short-term coverage. While others might not have a specific coverage program in place, but choose to add additional premiums for the increased risked added to the policy. It is important to keep in mind however, that no matter what form of coverage you are able to obtain, more often than not there is zero coverage for damages cause by those renting your space.
Regardless of whether or not your provider offers additional coverage for short-term rental purposes, it is in your best interest to inform your broker that you plan to utilize your dwelling for such a purpose, this way you can inquire as to what coverage they may be able to provide you. Not only that, but failure to inform them may result in a non-renewal or cancellation of your policy as you have increased the amount of risk that your policy holds without their knowledge.