September 19, 2017 by Arian
Why an Airbnb Host Needs Home Sharing Insurance
Many Ontario, Canada property owners are turning to Airbnb to rent out their properties on a short term basis for some extra cash, some may even do it as a full time business. It is important for you as a landlord to know what kind of Airbnb home insurance you need and also what is included and not included in Airbnb’s Host Guarantee & Host Protection. Please note, this post is written as of Sept 19th 2017, terms and conditions change frequently as well as changes in the general insurance market. Furthermore, the items discussed will only be a brief summary, so it is always best to ask a Licensed Broker for up to the date details or speak with Airbnb directly about their Host Guarantee.
Airbnb Host Guarantee vs. Host Protection Insurance
The Airbnb Host Protection Insurance is a liability coverage whereas the Host Guarantee is a property coverage.
What is Airbnb Host Protection Insurance
The Host Protection insurance is liability coverage up to $1 million USD, in the event of a claim of bodily injury or property damage. Example can include a guest breaking their wrist and suing a host or in some cases causing property damage to a third party. Some of the exclusions include intentional acts, accusations of slander, property issues such as mold, bed bugs, fungi are just some of the listed exclusions. It is important to note that some of these exclusions are standard under most insurance contracts. More detailed information can be found here: HPI Program Summary. If there is a valid claim, that coverage includes costs to investigate a claim involving a Host as well as provide a legal defense.
What is Airbnb Host Guarantee?
Airbnb will provide a host for every booking at no additional cost up to $1 million CAD to a host for damages to covered property. But, you must understand that the Host Guarantee is not a replacement for homeowners insurance. The Airbnb Host Guarantee carries many limitations and exclusions. Many things excluded from the Host Guarantee include things like personal liability, events caused by nature and weather related events, losses caused by Guests or Invitees after the expiration of the booking, cash, securities rare art work and jewellery are also excluded. Other exclusions and limitations apply which is why it should not be relied upon as insurance. More Information can be found here: Airbnb Host Guarantee.
Why Regular Home Insurance Won’t Cut It
A regular homeowners policy is meant for properties occupied by your family, once a rental suite is added or if the property in its entirety is rented out this is considered to be a material change, which should be reported to your insurance company prior to the change happening. to see if they are willing to insure it and if not give you time to find an insurance company that will.
What Type of Home Sharing Insurance Can Humberview Insurance Offer?
We offer policies designed for people who rent their homes on short-term basis through a home network such as Airbnb. These policies are not intended for long-term rentals to one individual or annual lease situations. And it is important to note, your house must qualify for underwriting guidelines such as having up to date utilities (such as roof, electrical, plumbing..etc) among other guidelines to qualify.
There are four coverage scenarios for different type of hosts:
- Those that rent their entire home up to 90 days of the year
- Those that rent their entire home up to 180 days of the year
- Those that rent a portion of their home such as a room or basement to multiple short-term guests year round.
- And finally, those that rent an income property to short-term guests year-round.
What Type of Coverages Apply in the above scenarios?
- Loss or damages to your building and personal property.
- Liability arising out of the short-term rental.
- Intentional acts, criminal acts or failure to act by a guest.
- Loss or damage to a guest’s property up to $1,500.
- Fair rental value loss (if an insured claim happens, such as fire occurs to your property and you suffer a loss of rental income).