Insurance for Airbnb rentals
If you occasionally rent your home or condo to guests through Airbnb, VRBO, HomeAway or other home-sharing services, you need a customized rental insurance policy to protect yourself and your property against unforeseen events and third-party liability.
What does Airbnb insurance cover?
A comprehensive insurance policy for Airbnbs rental properties through Zensurance typically includes:
- Commercial General Liability (CGL) Insurance: Also known as ‘slip-and-fall’ insurance, CGL protects against claims alleging third-party property damage or bodily injuries if, for instance, a customer visits the premises and slips, falls, and is injured. CGL may provide financial coverage for third-party medical expenses and your legal fees if you are named in a lawsuit.
- Commercial Property Insurance: Commercial property insurance protects against physical losses or damages to your property and its contents due to an external disaster, such as a fire, theft, or vandalism. It typically includes coverage for the property’s physical assets such as your furniture and personal belongings, as well as any electronics that are stolen or damaged.
- Rental Income: This type of coverage provides you with protection if you lose rental income due to damages to your property because of a fire, flood, or other insured perils.
- Loss Assessment Coverage: Condo owners share ownership and responsibilities with other individual unit owners for the condo building’s common areas such as a swimming pool or fitness centre. Although your condominium corporation may have adequate coverage, loss assessment coverage helps protect you if a claim is made against the condominium corporation that exceeds its insurance policy limit.
- Contingent Unit Coverage: Contingent unit coverage protects your condo unit. In cases where your condominium corporation has no insurance on your unit, lacks sufficient coverage, or the corporation’s policy does not cover the peril that occurred, adding contingent unit coverage to your policy may protect you from those damages.
- Cyber Liability Insurance: Cyber liability insurance could provide coverage for costs associated with cybercrime involving your technology systems and customers’ data. If your data is compromised due to a cyber-attack (such as phishing), cyber liability provides coverage for notification costs, legal expenses, and risk management fees.
What protection does Airbnb provide?
All Airbnb hosts receive two types of coverage from Airbnb:
- Host protection insurance: Airbnb’s host protection insurance may cover your legal responsibility for bodily injury to guests or others and damage to property belonging to your guests. It provides liability coverage for a host’s legal responsibility for third-party bodily injuries. It may also cover your legal responsibility for damage to common areas such as building lobbies and neighbouring properties caused by one of your guests. It does not cover injuries or damages resulting from an intentional act by one of your guests, loss of income, or damage to your dwelling or belongings. Airbnb’s host protection insurance is subject to policy terms, conditions, and exclusions.
- Host guarantee protection: Airbnb’s host guarantee protection is property damage coverage. It provides coverage for damages caused to your dwelling and belongings if they are damaged by a guest or others they invite to visit your home. Airbnb’s host guarantee program is not an insurance policy, and not all property damage caused by guests may be covered. It also does not provide protection for third-party bodily injuries to your guests. Airbnb advises its hosts to purchase additional insurance to protect their properties against third-party damages.
Why do Airbnb hosts need additional home insurance?
If you’re offering short-term rentals of your entire home, part of your home, a condo, or seasonal property through Airbnb or other home-sharing services, you need to protect yourself from any risks that could cost you thousands of dollars if something goes wrong. After all, your most significant investment is your home.
Listing your property on Airbnb turns your private residence into a business property. Your personal home insurance policy may not cover you for third-party bodily injuries or property damage if you file a claim. Plus, your home insurance provider could decide to void your policy, leaving you without any protection at all. Make sure you inform your current home insurance provider of your home-sharing plans to avoid that possibility.
Although Airbnb provides some level of coverage, there are limits to their coverage. That’s why you need to ensure you’re fully protected by adding a business insurance policy designed to protect short-term, home-sharing properties.
What risks do Airbnb hosts face?
Airbnb’s coverage limit might sound a lot, but when you consider the cost of legal fees, settlements, home repairs, and property replacement in the event of damages or a lawsuit, those costs can easily extend beyond Airbnb’s coverage limit. If it does, you are responsible to pay additional costs and may need to dip into your savings. That poses a tremendous risk to your financial health.
You can help mitigate the risks you face as an Airbnb host by:
- Ensuring you are operating within all federal, provincial, and municipal regulations
- If your short-term rental property is a condo, ensure you comply with the condo building’s policies on renting out your unit
- Purchase short-term rental insurance to augment the coverage Airbnb provides
- Charge your guests a security deposit to pay for any minor damages they create
- Furnish your dwelling with durable, easy-to-clean furnishings
- Don’t leave expensive or treasured items in your dwelling when renting it out
- Proactively perform any maintenance and repairs in or on your property (an insurance policy is not a maintenance contract)
- Install a home monitoring security system and consider installing smart locks and a noise monitoring device and advise your guests in your Airbnb listing of their existence
Common claims scenarios
Frequently asked questions