Why your home insurance may not be enough for Airbnb

Published: June 11, 2019

Updated: June 30, 2019

Author: Luke Jones

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Many homeowners are turning to Airbnb to supplement their earnings by listing a spare room or apartment on the sharing service. However, insurance companies are warning doing so changes home insurance coverage and homeowners should check their policy before listing on Airbnb.

Speaking to CBC News, several home insurance providers said listing properties or spare rooms on services such as Airbnb can change what risk a home is exposed to in the eye of an insurer. Furthermore, even Airbnb tells its users to have separate insurance to protect their homes.

“The vast majority of property insurance policies don’t expect homeowners to allow complete strangers to stay in their home without them being present,” Amanda Dean, vice-president Atlantic at the Insurance Bureau of Canada (IBC), told CBC News. “But that coverage and those rules can cease to apply the moment that the homeowner vacates the premises and leaves it in the hands of others.”

Some insurance companies have already created specific solutions to cover homeowners embracing the home sharing model. The Co-operators is one such company, which debuted its duuo product to protect short term rentals through insurance coverage.

“We saw a net need in the Canadian marketplace for Canadians that wanted to participate with hosting their homes on a casual basis not having the right insurance protection in place,” Robin Shufelt, managing director of duuo, told CBC News.

Insurance companies are stepping up, suggests Dean, creating policy add-ons instead of forcing customers to purchase separate commercial protection:

“The insurance industry has caught up very quickly with the advent of Airbnb and recognize fully that not everyone who offers their home to visitors through Airbnb is doing so 365 days a year,” Dean told CBC News. “People may opt to do it for a couple of months of the year, so a full commercial policy may not be what is needed.”