Airbnb And Home Sharing Insurance: What You Should Know

We live in a sharing economy, (a.k.a. collaborative consumption) and it’s become a trending business concept. It’s a preferred way for people to rent or borrow items rather than buy them.  This sharing economy has opened the doors for people to supplement their income.

It’s a win/win situation for both the owner and the paid borrower. This sharing economy is a way to enjoy experiences that weren’t available a decade ago, and save money. Two excellent examples are Uber and Airbnb. With Airbnb you can rent your home for short or long stays, but there are implications with respect to home insurance.

Airbnb and Home Sharing Insurance – What You Should Know

Although Airbnb hosts have the benefit of supplemental income and guests enjoy an actual ‘home’ away from home, it doesn’t always go smoothly. So, how does this affect your home owners’ insurance if you’re a host?

Airbnb has a host insurance program that provides primary liability coverage up to $1,000,000 per occurrence in the event of a third-party claim of bodily injury or property damage related to an Airbnb stay; but it has limitations and exclusions.

Airbnb’s protection only offers basic coverage, so there is still a lot a host can be responsible for if the transaction goes wrong. If something is stolen or damages are done to a shared area for example, you would have to cover the expenses to repair the damages and won’t be compensated for loss of income while fixing them. As well, you’d have to pay for the costs associated with liability claims.

Home Sharing Insurance

Airbnb is an American company and because of its popularity, U.S. insurance companies are adapting to home sharing insurance as a separate product. In Canada, only one province (Quebec) is considering regulations governing home sharing insurance, but some Canadian insurance companies have created a specific home sharing insurance policy.

If you’re considering taking advantage of the new economy and live in Alberta, make sure you educate yourself about your home insurance coverage. Before you open your home to Airbnb travelers, you should first check with your insurance company.

Phone your insurance broker and tell them about your plans. Find out if your home owners insurance company recognizes home sharing insurance and offers insurance products to protect you.  Your broker can also help you find out if your current coverage is adequate and answer your questions.

Some things to consider before calling your broker is how many days of the year you plan to host and any individual risk characteristics that pertain to your situation.

At Sadler Insurance our brokers can help you find an insurance company that recognizes home sharing insurance and make sure you’re protected. If you plan on opening your home to Airbnb guests give us call first.