Understanding Airbnb Insurance in Ontario: What Landlords Need to Know
With the increasing popularity of short-term rental platforms like Airbnb, many Ontario property owners are taking advantage of the opportunity to earn additional income. For some, hosting is a part-time side hustle; for others, it’s a full-time business. However, renting out your property comes with risks, and understanding the insurance implications is crucial.
Specifically, you need to know what kind of insurance coverage is required and how Airbnb’s AirCover for Hosts program works. While Airbnb offers certain protections, there are significant limitations and exclusions, making it vital to explore additional insurance options.
Airbnb’s AirCover for Hosts: An Overview
Airbnb provides AirCover for Hosts, a comprehensive protection program that includes:
- Host Damage Protection: Coverage for damage to your property and belongings caused by guests, up to $3 million USD.
- Host Liability Insurance: Liability coverage for up to $1 million USD for claims involving guest injuries or property damage to others.
These protections sound appealing, but they are not substitutes for traditional homeowners or landlord insurance policies.
Host Damage Protection
Host Damage Protection offers coverage for property damage caused by guests during their stay, up to $3 million USD. It also includes:
- Art and Valuables Coverage: Protects fine art, jewelry, and collectibles.
- Vehicle Coverage: Includes cars, boats, and watercraft stored at your property.
However, Host Damage Protection is not insurance and has key exclusions:
- Damage caused by wear and tear or maintenance issues.
- Losses resulting from natural disasters (e.g., flooding, earthquakes).
- Certain types of personal property, like cash or securities.
Hosts should view this as supplemental protection, not a replacement for comprehensive home-sharing insurance.
Host Liability Insurance
Host Liability Insurance provides up to $1 million USD in coverage for claims where you’re found legally responsible for:
- Bodily Injury: Injuries sustained by guests or others during their stay.
- Property Damage: Damage to or theft of property belonging to guests or others.
It also extends to damages caused by guests to:
- Common Areas: For example, a guest damages property in a shared lobby or hallway.
While helpful, this insurance has exclusions, such as:
- Intentional or criminal acts by hosts or guests.
- Issues related to mold, bed bugs, or fungi.
This liability coverage can assist with legal defense costs and claim investigations, but it should not replace a comprehensive insurance policy tailored to your hosting needs.
Why Regular Home Insurance Doesn’t Cover Airbnb Rentals
Standard homeowners insurance policies are designed for owner-occupied residences. Renting out a portion of your home (e.g., a basement) or the entire property constitutes a material change in use, which must be disclosed to your insurance provider.
Failure to notify your insurer could result in denied claims or policy cancellation. If your current insurer won’t cover short-term rentals, you’ll need to explore specialized insurance options.
Specialized Airbnb Insurance Options
At Humberview Insurance, we provide tailored insurance solutions for short-term rentals. These policies address the gaps left by Airbnb’s AirCover for Hosts and offer comprehensive protection for your property and liability.
Coverage Scenarios for Different Hosting Arrangements
We offer policies designed for various hosting setups:
- Entire Home Rentals for Up to 90 Days per Year
- Entire Home Rentals for Up to 180 Days per Year
- Partial Home Rentals Year-Round: Renting a room or basement to short-term guests.
- Income Properties for Short-Term Guests Year-Round
What Does Specialized Airbnb Insurance Cover?
Our insurance policies typically include:
- Building and Personal Property Protection: Coverage for damages caused by guests.
- Liability Coverage: Protection for incidents involving bodily injury or property damage.
- Guest Property Coverage: Compensation for loss or damage to a guest’s belongings, up to $1,500.
- Fair Rental Value Coverage: Reimbursement for lost rental income if your property becomes uninhabitable due to an insured event (e.g., fire).
Key Benefits of Comprehensive Airbnb Insurance
While Airbnb’s AirCover for Hosts offers limited protections, it cannot replace a full insurance policy. By obtaining a comprehensive short-term rental insurance policy, you ensure:
- Full protection for your property and belongings.
- Liability coverage beyond Airbnb’s $1 million limit.
- Coverage for risks that Airbnb excludes, such as natural disasters or intentional acts by guests.
Managing a short-term rental property comes with unique risks that require careful planning and adequate protection. Relying solely on Airbnb’s programs could leave you exposed to significant financial and legal risks.
To ensure peace of mind and comprehensive protection, contact Humberview Insurance today for a free consultation. Our licensed brokers can help you find the best coverage tailored to your hosting needs.