Travel has become so much more accessible, which has propelled the local real estate market in new directions. Short-term rentals that create the home-away-from-home effect are more comfortable, unique, and accessible, creating a growing demand for this type of accommodation. Over platforms like Airbnb, homeowners connect with vacationers offering their own homes and rental properties.
It’s critical to understand the details of your home insurance if you want to generate additional income by renting out your property on Airbnb. Making your home into an Airbnb transforms it into a commercial property. Therefore, it will help safeguard your most valuable asset against any hazards that could cost you hundreds of dollars.
Do I Need Home Insurance for my Airbnb?
You may have homeowners insurance, but you need to verify if it covers home-sharing services such as Airbnb. By listing your home as an income property, you have amended the conditions of your contract with your home insurance provider. You will need to notify your provider, and they can choose to keep it on record or terminate your agreement. If your contract is terminated, you won’t be covered if you need it, even if it’s unrelated to Airbnb.
Before you rent, get house insurance quotes from a few different companies to make sure they give this coverage. Airbnb automatically covers everyone, although there are some limitations to its coverage.
Airbnb does provide insurance protection in the form of penalties and additional charges for damage caused by rowdy visitors; you should still take all necessary precautions to protect your property. Before you hit publish, check with your broker to see if becoming an Airbnb host will affect your insurance.
Why Does My Airbnb Need Extra Home Insurance?
Airbnb provides two levels of basic insurance coverage:
- Host protection insurance: pays up to $1 million in liability coverage for injuries or property damage caused by third parties such as guests, condo management, and neighbours.
- Host guarantee protection: covers up to $1 million in property damage caused by visitors, including accidents, theft, and other losses. Airbnb contents insurance that is provided covers some valuables in your house but excludes jewelry, rare art, and antiques. Try avoiding the risk of these being stolen by removing these items from the property.
Although $1 million may sound like a lot of money, it may not be enough to cover medical bills if someone falls due to issues on the property. The host protection insurance does not cover the loss of income incurred by the injured party if they cannot work.
The Host Guarantee, according to Airbnb’s website, does not replace homeowner’s insurance. They recommend that you chat with your insurance broker, familiarize yourself with the terms, and understand what your coverage entails.
Where to Get Additional Insurance for Your Airbnb
There are only a few insurance firms in Canada that offer insurance for home-sharing, like Airbnb. Because these services are add-ons to existing coverages, you may need to switch providers to get them.
Compare home insurance quotes from different companies and make sure you know what the policy covers and what it doesn’t.