Accommodation-sharing websites, such as Airbnb, HomeAway and Vacation Rentals By Owner (VRBO), have risen in popularity over the past few years for those seeking vacation accommodation and for residents wishing to sublet to travellers. While these services are convenient, accommodation-sharing websites aren’t always clear when it comes to explaining insurance gaps.Last spring, a Calgary couple who rented out their home through Airbnb, returned to find
significant damage. This scenario highlights the potential dangers involved with using accommodation-sharing websites.
We break down the insurance factors both hosts and travellers should be aware of before booking through these sites.
Hosts: Renting out your home
Are you considering renting out your residence to travellers? Whether you rent your entire home or a spare room, it’s important to call your BrokerLink broker.
Your broker will ask you a series of questions, such as how often you plan on renting to travellers and what monetary value you expect to gain. From there, your broker will inform you if your home insurance or tenant’s insurance will cover you for liability, theft and other damages. If the frequency and income you expect to earn from hosting surpasses a certain amount, your broker may advise you to purchase commercial insurance, as your hosting practices qualify as a business.
Even if you rarely host travellers and your home insurance policy provides adequate coverage, it is extremely important to notify your broker. Similar to renting out a secondary suite in your home, if you need to file a claim due to the actions of a guest and you did not notify your insurance company you were renting out your residence, your insurance policy may not provide protection and reimbursement.
If you are not hosting travellers frequently enough to warrant purchasing commercial insurance, consider increasing your liability coverage to protect yourself from possible risks associated with having additional people on your property, such as slips and falls. Similar to renting out a secondary suite, it is your responsibility your home complies with all safety requirements and residential restrictions within its municipality.
Be aware of accommodation-sharing websites that promise protection against damages incurred from renting your residence to guests. Quite often, this coverage is not actual insurance and will exclude liability and contents such as jewellery and art. These ‘protection plans’ often state that you are expected to attempt to resolve the incident and collect damages from your guests first. If this is unsuccessful, you will then be expected to utilize your home insurance coverage in the event of a claim.
Only after exhausting these resources, would you be eligible to attempt to collect from the protection plans offered by certain accommodation sharing services, such as Airbnb’s Host Protection Coverage. These types of protection plans usually come with lengthy terms and conditions that state further limitations, such as limited time periods to report claims. Always update your home insurance and do not rely on site offered protection plans. If you are unsure, your BrokerLink broker is happy to discuss your options.
Travellers: Renting accommodation while travelling
If you’re headed out on vacation, renting someone else’s home may seem like an attractive option, since costs are often less than paying for a hotel.
Do you need to purchase additional insurance while you are renting out someone else’s home? Your current home or tenants’ insurance will cover you for any damages you may cause while travelling, assuming that these damages are unintentional. If you were to cause property damage to your host’s residence, the host would first try to collect from your home or tenants’ insurance before using their own insurance policy to cover the damage.
Call your BrokerLink broker before you go on vacation to inform them of your plans and to also purchase travel insurance if you are vacationing outside the country.
Accommodation sharing may work well for some travellers and hosts, but we strongly advise all parties to have proper insurance in place beforehand. Contact your BrokerLink broker ahead of time before you enter an accommodation-sharing arrangement to allow adequate time to set up and implement any additional coverage or adjustments to your insurance.