If you're thinking about renting out your home or apartment on Airbnb in Canada, it's important to know about the insurance requirements. Basically, you need insurance coverage to protect your Airbnb property and your business in case anything goes wrong.
In this blog post, we'll go over all the details about the insurance requirements for Canadian hosts on Airbnb and why it's so important to have insurance! We'll also talk about the different types of insurance you need, like liability insurance, property insurance, and business insurance. Don't worry if you're not familiar with these terms - we'll explain everything in simple terms so you can understand it easily.
By the end of this post, you'll have all the information you need to choose the right insurance coverage for your Airbnb listing, so you can protect your property, your guests, and your business. Let's get started!
Remember, this isn’t advice from an insurance professional, be sure you get in touch with a broker or your City to understand what specific insurance you’ll need for your home.
Let’s run through some FAQs on insurance and talk about the different types of coverage available!
What kind of insurance do you need for an Airbnb property?
As an Airbnb host in Canada, there are three main types of insurance that you should consider obtaining in order to protect yourself, your property, and your guests. Just remember, you might not need all of them if you are only renting out one room in your house, or if you rent to two people max.
Liability Insurance:
Liability insurance is crucial for Airbnb hosts as it protects you from any potential legal liability for injuries or property damage suffered by your guests while staying in your home. It covers the legal costs and any compensation that you may be required to pay if a guest gets injured or their property gets damaged while they're staying in your Airbnb listing.
For example, if a guest slips and falls in your home and gets hurt, or if they accidentally break something valuable in your property, liability insurance can help cover the costs associated with those incidents.
Property Insurance
Property insurance covers any damage to your property caused by natural disasters, theft, or vandalism. This type of insurance is important for Airbnb hosts as it protects you from any potential losses that may occur as a result of damage to your property by guests.
Almost everyone in Canada with a mortgage has property insurance, so this is one that you are probably familiar with.
Business Insurance
Business insurance covers your Airbnb business from any potential risks or losses, such as income loss due to cancellations or property damage caused by guests. It also covers any legal liability that you may incur as a result of your business operations.
It's important to note that not all insurance policies are created equal, and you should carefully review the coverage provided by each policy to ensure that it meets your specific needs as an Airbnb host in Canada. Additionally, you should also consider the cost of the insurance policy, as well as any deductibles or limits on coverage that may apply!
Finding the best rate for Airbnb Insurance in Canda
I suggest you use a rate-finding website that will shop around for the best rates for you. One website that compares home insurance rates in Canada is Ratehub.ca You can use their website to compare quotes from different providers and find the best rate for you.
Does Your Homeowner's Insurance Cover Airbnb?
You likely already have homeowner insurance for your house. Even though you have insurance, most standard homeowner insurance policies in Canada do not provide coverage for short-term rentals, including Airbnb. This means that if you're renting out your home or apartment on Airbnb and you only have a standard homeowner insurance policy, you may not be adequately covered in case of any damages or accidents.
The reason for this is that most homeowner insurance policies are designed to cover long-term rentals, where the tenant signs a lease and resides in the property for a period of at least 6 months. Since Airbnb rentals are typically short-term, they are considered to be a different type of risk compared to long-term rentals and therefore require a different type of insurance coverage.
That being said, some insurance companies in Canada do offer specialized insurance policies for short-term rentals like Airbnb. It's important to check with your insurance provider to see if they offer this type of coverage or to consider purchasing a separate insurance policy specifically designed for Airbnb hosting.
For example, the home insurance policy I have covers Airbnb, but only for a certain amount of bookings at a time. When you have more bookings, you have to get commercial insurance.
It's always better to be safe than sorry, so make sure you have the right insurance coverage in place before renting out your home or apartment on Airbnb.
What does AirCover insure for Airbnb rentals in Canada?
AirCover is a protection program offered by Airbnb to Canadian hosts. It's not exactly insurance, but it provides a “top-to-bottom” protection for your Airbnb rental. Unlike some of its competitors, AirCover is free and exclusive to Airbnb hosts. It covers a range of incidents and accidents that can happen during an Airbnb rental, including liability insurance, property damage, pet damage, deep cleaning, income loss protection, and more.
Exact coverage of AirCover
According to the Airbnb website, AirCover will pay out for the following incidents for Hosts:
$1 million in liability insurance coverage for injuries or property damage suffered by guests while staying in your home.
Up to $1 million in coverage for accidental damages caused by guests to your property or belongings.
Coverage for unexpected damage done by four-legged guests.
Compensation for unexpected cleaning costs.
Reimbursem*nt for lost income if you have to cancel confirmed bookings due to damage.
A 14-day window to report damage, even if you have back-to-back bookings.
Faster reimbursem*nts for guest damages (9 days on average).
Access to a dedicated support line with priority routing for Superhosts.
What are the requirements for filing a claim with AirCover?
If you need to file a claim with AirCover, you can fill out their liability insurance intake form. The information will be sent to their trusted third-party insurer, who will assign your claim to a representative.They’ll resolve your claim according to the terms of the insurance policy
How long does it take for an AirCover claim to be resolved?
After you submit your AirCover for Hosts request through the Resolution Center within 14 days of the responsible guest’s checkout, your guest will have 24 hours to pay.If they decline to pay the full amount or don’t respond, you’ll be able to involve Airbnb Support
If you need additional coverage beyond AirCover, it's a good idea to talk to your insurer to see how it overlaps with your existing policy. With AirCover, hosts can have peace of mind knowing that they have comprehensive protection for their Airbnb rental.
Insure Your Success: Don't Gamble with Your Airbnb Business!
Having the right insurance coverage is crucial for Airbnb hosts in Canada. It not only protects you from unexpected incidents and accidents that can happen during an Airbnb rental but also gives you peace of mind and confidence to run your business.
While AirCover is a good option for basic coverage, it may not be enough for some hosts. It's important to research and compare different insurance options and consider factors such as coverage, premiums, deductibles, and exclusions before making a decision.
Remember, every host's situation is different, and you should talk to your insurer to see how your policy overlaps with AirCover or other insurance options.
Don't wait until something happens to obtain proper insurance coverage for your Airbnb listing. It's always better to be safe than sorry!
