One in five Canadian homeowners aged 25 and older have hosted or would consider hosting guests through a home-sharing service like Airbnb, HomeAway, Flipkey and VRBO, according to research from Aviva Canada.
And those hosts have long had an insurance dilemma: most home insurance policies don’t include home-sharing, and if you have to file a guest-related claim, you’d likely see it denied, or even have your entire policy cancelled. But there are some options.
Square One Insurance was one of the first insurers to offer Airbnb home insurance coverage in exchange for slightly higher premiums and a $2,500 deductible for crime-related losses. It primarily focuses on protecting your property from damage that guests might cause. It doesn’t, however, cover damage to guests’ belongings, and is only available for those living in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario. Also consider that Square One only offers home insurance, so you wouldn’t be able to get a discount for bundling it with your auto insurance.
In February, Aviva Canada got in on the home-sharing insurance game. Its coverage is available across Canada as either an add-on to an existing policy or as standalone coverage for a secondary income property such as a cottage or a condo. Because Aviva is a larger company that also offers auto insurance, bundling discounts remain an option.
Pricing varies depending on how frequently you want to rent out your space. To rent out your entire home for up to 90 days a year or to rent out a portion of your home year-round, you’ll pay an extra 20% on your premium. To rent out your entire home for up to 180 days a year or to rent out an income property year-round, you’ll pay an extra 40% (though outside of Alberta and Ontario, coverage for income properties drops to 20%).
Aviva’s product includes liability tied to short-term rental guests, loss or damage to the host’s home and personal property, guests’ intentional and criminal acts, guests’ failure to act, damage to guests’ property up to $1,500, and loss of income if the unit can’t be rented out while it’s being repaired.
In some situations, this coverage is more generous than that of traditional hotels. Chris Fowler, senior manager of personal lines propositions at Aviva Canada, also notes that if someone’s iPad, for example, is lost or damage while she is staying in a hotel or bed and breakfast, she would claim the loss against her own home insurance policy, not the hotel’s.
Aviva’s coverage is only valid if you find guests through a home rental network or a professional property management company, some of which offer their own insurance for hosts. While Airbnb’s host protection insurance coverage is “an okay product,” according to Fowler, it has some gaps: damage by non-Airbnb guests is, of course, excluded, as are loss of earnings, damage to drywall made in China, intentional acts, and loss or damage to guests’ property.
Before this coverage became available in February, Aviva Canada policyholders who rented out their space through a home-sharing system might have difficulty when it came to making claims, which were judged on a case-by-case basis, says Fowler.
To estimate your insurance costs, get a home insurance quote.