Established in 2007, Airbnb was born when two friends struggling to pay their rent in San Francisco decided to rent their living space to people attending a conference in that city. That led the roommates to create Airbnb, and before long, the home-sharing platform went global. Airbnb started offering its services in Canada in 2009.

There’s no doubt you can make additional income renting your home, condo, or seasonal property on Airbnb and other third-party short-term rental platforms. In Canada, hosts earn an average of $10,300 annually and made more than $7,700 in the summer of 2022 alone.

But before diving in, it’s critical to weigh the pros and cons of doing so and how you intend to use such platforms. Chief among those considerations should be protecting your property and yourself from damage to your property caused by guests and third-party liability if one is injured during their stay on your premises.

Airbnb insurance for hosts.

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What Protection Does Airbnb Offer Hosts?

Airbnb provides its hosts with limited financial protection under its AirCover program, but it isn’t an insurance policy.

Called host damage protection, AirCover for hosts provides up to US$3 million for damages per rental to your property or possessions caused by a guest if that guest does not pay for the damages. Additionally, it also provides liability protection up to US$1 million in the rare event that a guest gets hurt or their belongings are damaged or stolen.

Specifically, the protection includes:

  • Damage to your home, furnishings, and belongings caused by a guest or their invited friends
  • Damage to parked vehicles or boats caused by a guest or their invitees
  • Lost income if you must cancel a future, confirmed reservation because of damage to your property caused by a guest
  • Extra cleaning costs following a guest’s stay. For instance, if your carpets need to be professionally cleaned because the guest’s pet soiled them.

According to its terms and conditions, Airbnb’s host damage protection plan is designed to cover unexpected costs related to a guest’s stay, and it is subject to exclusions, limitations, and other conditions. For example, the program’s ‘covered losses’ is limited to physical damage or loss to a host’s property caused by a guest, their pets, or invitees.

Moreover, third-party liability protection for hosts is capped at US$1 million if a guest or one of their invitees is injured on your property or if their personal property is damaged while at your premises.

What Does Airbnb AirCover Not Cover?

For starters, if your property is damaged by fire, water, or a natural disaster (like a tornado), is vandalized or broken into and ransacked by thieves, AirCover does not pay for these types of damages like commercial property insurance would.

And while AirCover does offer third-party liability US$1 million cover for hosts if a guest or one of their invitees is injured on your property, or if their personal property is damaged, if a guest sues you for damages, you’re on the hook to pay anything above and beyond that limit. A general liability insurance policy includes more extensive coverage for your third-party liability risks by allowing you to increase the coverage limit beyond $1 million.

AirCover also doesn’t cover vehicles you own (cars, trucks, trailers, motorcycles, watercraft and large vehicles like a tractor). Other exclusions for property damages or losses include money, trees and crops, landscape gardening, security cameras and surveillance systems, and fine art and valuables.

Additionally, there’s no help available through AirCover if you suffer a cyber-attack or data breach that compromises your and your guests’ confidential information and leads to identity fraud like a cyber liability insurance policy does.

Above all, AirCover for hosts is restricted to damages caused by guests during their stay. It doesn’t cover damages that occur or are discovered after a guest departs your property.

Does a Homeowner’s Insurance Policy Cover Short-Term Rentals?

Generally, no. A residential homeowner’s insurance policy is not designed to cover business-related activities such as offering short-term property rentals on Airbnb or any other home-sharing rental platform.

Furthermore, if your home insurance company discovers you occasionally or regularly rent your property and they did not know about it, the insurer might deny cover for a claim you submit and  could cancel your home insurance policy. If that happens, it’ll make getting a new home insurance policy very difficult and likely more expensive because other insurers may consider you a high risk.

It’s like the difference between homeowner and landlord insurance. Home insurance is unlikely to cover damage and loss or liability risks related to renting or leasing a home, condo, basement apartment, or other type of property.

What About Insurance for Other Short-Term Rental Providers?

Beyond Airbnb, there are other short-term rental providers, including: 

  • VRBO (formerly HomeAway)
  • SiniStar
  • Expedia
  • Kid & Coe

Like Airbnb, each offers rental hosts varying levels of third-party liability coverage to cover injuries to your guests or damage to their personal property. However, you need to read the fine print to understand what these protection programs provide and what is excluded. 

How to Get Extra Airbnb Insurance Protection

Adequately protecting your vacation or short-term rental property requires a comprehensive Airbnb insurance or VRBO insurance policy from Zensurance.

It’s a customizable policy that protects you against general liability claims, damage to your property, lost income following an insurable loss, and cyber liability risks.

Fill out our online application for a free quote. Let our knowledgeable and friendly brokers get the low-cost policy you need, answer your questions, and tailor the policy to suit your needs so you can relax knowing your rental property is adequately protected.

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About the Author: Alexandria Anthony

Alexandria Anthony is the Team Lead, Property & Hospitality, at Zensurance.