Marie-Claude Dulac

By Marie-Claude Dulac

March 11, 2016

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Renting With Airbnb? Check Your Home Insurance!

Article revised on 6 July 2018

Thanks to platforms for exchanging homes and short-term rentals between individuals such as Airbnb and HomeAway, many people have discovered a way to travel inexpensively or to earn rental income. It sounds like a win-win situation.

However, as these platforms grow in popularity, horror stories are becoming more frequent. Vandalism, breakage of all types, theft, accidents and civil suits are some of the risks involved in this type of operation. Does your home insurance cover you under these circumstances? Let us explain.

Before renting your home with Airbnb or Homeaway, check your home insurance

If you lend your home to friends or relatives from time to time, there’s no problem. Your insurance covers you for all the usual risks.

However, if you rent the premises to strangers, your insurer decides whether the risks are covered and under what conditions. Since renting property is a commercial activity, it is subject to certain restrictions. It could even compromise your entitlement to an indemnity in the event of loss if your insurer didn’t receive prior notification.

The Insurance Bureau of Canada (IBC) recommends that you call your insurer before handing over the keys to third parties or strangers. By doing so, you’ll find out what risks you are running and if your coverage can be adjusted to adequately protect you against theft, vandalism and legal suits.

Cover your legal liability, whether you’re the host or the guest

Many people, both travellers and hosts, neglect to check what their legal liability insurance covers. However, you run the risk of situations that could get you into hot water. For example… while travelling, you may accidentally set a fire in the home you rent. Or, the guest who rents your home doesn’t clear the snow from the entryway and a visitor falls and gets injured. In these situations, you may be facing a claim for damages. Appropriate legal liability insurance could come in handy.

How can you reduce the risks?

  • To the extent possible, don’t leave any valuables in the home.
  • Remain in the area while your guests are staying. If you can’t be close, give your guests contact information for someone you trust, and ask that person to drop in to make sure everything is going well.
  • Be choosy about your choice of guests: some can present increased risk of problems.
  • You can follow the Airbnb security advice or suppliers on the home exchange platform. It will be useful, but their advice doesn’t replace that of your insurer.
  • Find out about all the service provider warranties, policies and conditions of use to avoid unpleasant surprises and know what you’re getting into.

Conclusion: Don’t let a good thing turn into a nightmare and put the things you’ve worked for years to afford at risk. Whether you rent to strangers or you stay in someone else’s home through a home exchange platform, notify your insurer and verify what your insurance covers.

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