What does becoming an Airbnb host do to your insurance coverage?

Many Canadian property owners are turning to Airbnb to rent out their properties on a short-term basis for some extra cash, some may even do it as a full time business. It is important for you to know what kind of home sharing insurance you need and also what is included and not included in Airbnb’s Host Guarantee & Host Protection.

Is Airbnb’s Host Guarantee and Host Protection enough insurance for you?

If you’re like most people, you’ve become accustomed to accepting terms and conditions on everything from your phone updates to music subscriptions to social media updates without every actually reading the long and confusing documents.

When deciding to rent part or all of your property through Airbnb, it’s easy to not look into the details of their host guarantee and protection.

Right away, you’ll see “To keep you, your home, and your belongings safe, we cover every booking with $1M USD in property damage protection and another $1M USD in insurance against accidents.” They claim to “have your back” with

• Free $1M protection for property damage
• Free $1M liability insurance

Are you really covered?

Once you start digging, you soon find out that the Host Guarantee program doesn’t cover cash and securities, collectibles, rare artwork, jewelry, pets or personal liability. The program also doesn’t cover loss or damage to property due to wear and tear.

Just look at their excluded losses:

• Any losses caused by a Guest or Invitee after the expiration of the booking period shown in the applicable Listing.
• Losses or damages for Covered Property, which arise out of any one booking of a Covered Accommodation by a Responsible Guest, in excess of the Limit.
• In the case of Fine Arts, losses or damages if the Fine Arts cannot be replaced with other of like kind and quality and any loss or damage from any repairing, restoration or retouching process.
• Any losses, damages, cost or expense of whatsoever nature, directly or indirectly, caused by or resulting from any of the following, regardless of any other cause or event contributing thereto:
  • any hostile act or act of war, terrorism, insurrection or rebellion;
  • actual or threatened malicious use of poisonous biological or chemical materials;
  • nuclear reaction or radiation or radioactive contamination;
  • seizure or destruction under quarantine or custom regulation, or confiscation by order of any governmental or public authority;
  • contraband, or illegal transportation or trade.

And, excluded property:

• Excessive use of electricity, gas, fuel, water or other utilities provided for the Covered Accommodation;
• Mysterious disappearance, loss, or shortage disclosed on taking inventory, or any unexplained loss of inventory;
• Identity theft or identity fraud.

But realistically, it’s not just what is and isn’t covered under their policy that you should be thinking about. You should be more concerned about what becoming an Airbnb host will do to your existing mortgage insurance and house insurance. And the only way to really find out whether or not becoming a host is a good idea is to talk to your banker and to a trusted insurance broker.

Note: This blog post is based on information gathered from the Airbnb public website as of May 2019.