Airbnb Insurance

What is Airbnb insurance?

Airbnb insurance is a type of rental insurance aimed at protecting property owners from risk. The minute you rent your private residents out on Airbnb, VRBO, and the like, it becomes a business property, and as such, it requires additional protection.

Whether you rent out a room in your home to make some extra money or you own an entire property dedicated to short-term rentals, you can benefit from Airbnb insurance. The risks that Airbnb insurance protects against vary depending on the provider and the coverage you choose.

However, it may help safeguard you against risks like bodily injury, property damage, theft, fires, and more.

Do I need Airbnb insurance on top of home insurance?

If you own a property, then chances are you already have property insurance (sometimes referred to as home insurance or homeowners insurance). But it must be noted that property insurance typically only applies to private residences, not properties used for business purposes, such as rentals.

As such, your home insurance policy will not cover damage caused by business or other income-generating activities, including Airbnb rentals.

As mentioned, once you become an Airbnb host, your property becomes a place of business, similar to a hotel or inn. The minute your first guest arrives, your standard homeowners’ insurance coverage no longer applies to that property or that portion of your property.

Specifically, your personal home insurance policy will not include coverage for third party property damage or bodily injury.

Without additional coverage, you will be left unprotected, which can open you up to a wide range of financial risks, including expensive lawsuits. To protect one of your biggest investments - your home - as well as your new revenue stream, it’s crucial to purchase Airbnb insurance on top of your existing home insurance policy.

Ultimately, if you are considering listing a property on Airbnb, contact an experienced insurance broker as soon as possible. BrokerLink is one of the leading insurance brokerages in Canada. We are home insurance experts and will ensure you have a policy that meets your personal and business needs.

We can also explain the coverage gaps between your personal policy and the protection provided by Airbnb, to ensure you buy the exact coverage you need to protect your home once it becomes a rental property.

We also recommend informing your existing home insurance provider of your intentions to become an Airbnb host. Failure to do so can result in your insurance company voiding your policy.

What protection does Airbnb provide?

Some short-term rental companies provide their hosts with certain types of coverage to help them protect their rental property.

For example, Airbnb offers the following two coverages to hosts:

Host protection insurance

Airbnb’s host protection insurance can cover you in the event that a guest or other person is injured on your property or the guest’s property is damaged during their stay. It is essentially a form of liability coverage protecting the host against claims of third party bodily injury and property damage.

The property damage coverage extends to damage done to common areas of buildings, including lobbies, fitness rooms, or swimming pools, as well as neighbouring properties. However, there are limits to Airbnb’s host protection insurance.

For example, it does not cover bodily injuries or property damage resulting from an intentional act by a guest, loss of income, or damage to the host’s dwelling or belongings. In most cases, Airbnb provides $1,000,000 in host protection insurance.

Host guarantee protection

Host guarantee insurance is a form of property damage coverage offered by Airbnb. It may cover the cost of damage to your dwelling and belongings if they are damaged by a guest or other people invited by the guest.

It’s important to note that Airbnb’s host guarantee protection is not an insurance policy. In addition, not all types of property damage caused by guests are covered and it does not protect against third party bodily injuries sustained by guests. For this reason, Airbnb advises all hosts to purchase additional insurance to protect their rental properties from third party damage.

Even if the company you work with offers built-in coverage, there are limits to this coverage. In many circumstances, it won’t be enough. For example, if an expensive lawsuit is brought against you, it could easily cost more than the coverage limits provided by Airbnb.

For this reason, the only way to ensure you are fully protected is by adding a rental insurance policy designed to protect short-term property rentals.

What does Airbnb insurance cover?

As you now know, the coverage provided by Airbnb has major gaps. Luckily, when you purchase rental property insurance through a reputable insurance brokerage, you can receive the level of coverage you truly need.

Though coverage varies depending on your preferences and insurance provider, the most common types of Airbnb insurance coverage are as follows:

Commercial general liability insurance

Also known as “slip-and-fall” insurance, commercial general liability insurance protects your Airbnb property from claims of third party property damage or bodily injury.

For example, if a guest slips and falls on an icy walkway leading to your rental property, the cost of any necessary medical expenses, as well as legal costs to fight the lawsuit, will be covered by your insurance company up to the policy limit.

Commercial property insurance

Commercial property insurance is designed to protect against physical losses or damages to your rental property and its contents in the event of an external disaster.

Examples of external disasters are fires, water damage, theft, or vandalism. This type of coverage typically protects the host’s physical assets, such as furniture or appliances, as well as their personal belongings, like electronics.

Loss assessment coverage

If you operate an Airbnb in a condo building, loss assessment coverage is important. Since condo owners share ownership and maintenance responsibilities with others in their complex, loss assessment coverage can protect you if a claim is brought against the condominium corporation that exceeds its insurance policy limit.

Loss of rental income

Loss of rental income is another type of Airbnb insurance coverage that can protect you from the financial ramifications of losing out on valuable rental income due to an insured peril, such as a fire or flood.

Cyber liability insurance

As an Airbnb host, you likely store important guest information on the internet, ranging from financial information to personal information. In the event that your system is hacked or breached and this confidential information is stolen, cyber liability insurance can help pay for any applicable notification costs, legal expenses, and risk management fees.

Tips for mitigating risk as an Airbnb host

Operating an Airbnb or other short-term rental property comes with many risks. Beyond investing in a quality rental insurance policy, there are a few other steps you can take to ensureAirbnb hosting goes off without a hitch.

A few of our top tips for mitigating risk as an Airbnb host in Canada are as follows:

• Make sure that your Airbnb property complies with all provincial, federal, and municipal regulations.
• If the property you are renting out is a condo, check the building’s short-term rental policies to ensure you are allowed to do so.
• Outfit your rental property with durable, easy-to-clean furniture and decor.
• Do not leave high-value or sentimental items in your rental property.
• Don’t forget to charge each guest a security deposit so that you have recourse should any damage be done.
• To ensure the safety and security of your property at all times, consider installing smart locks or an alarm system.
• Keep up-to-date on all necessary maintenance and minor repairs.

Contact BrokerLink to learn more about the importance of rental property insurance for Airbnb hosts

Quality rental insurance is a must for any homeowner who operates a short-term rental property through Airbnb, VRBO, HomeAway, or another home-sharing service. Whether you’ve been operating a property for years or are considering listing your spare room on Airbnb, you will need adequate insurance.

Without additional insurance, you open yourself up to major financial risks. From bodily injury and property damage to lawsuits, there is a lot that can go wrong at a rental property, and it can be expensive if you are forced to pay out-of-pocket.

Unfortunately, a personal home insurance policy coupled with coverage provided by Airbnb is not enough. Instead, to get the protection you need, you must purchase a separate Airbnb insurance policy.

If you’re ready to take the plunge and purchase Airbnb insurance or still have questions about how Airbnb insurance can benefit you, contact BrokerLink today. We are experts in both home and business insurance and can make sure you find a policy that suits your new endeavour.

Our knowledgeable and friendly insurance advisors will take the time to understand your needs and find a comprehensive policy at an affordable price.

Get started today by requesting a free Airbnb insurance quote from BrokerLink. Give us a call or send us an email and we’ll get back to you with a complimentary quote.

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