Airbnb Insurance in Canada: What You Need to Know

Airbnb has disrupted the hospitality industry, giving property owners an excellent opportunity to rent out their homes to travelers looking for unique places to stay where they can live like locals.

But if you plan to start Airbnb in Canada to make extra money, you must first protect your assets from potential risks from renting your home to strangers and get proper insurance for your short-term rental property.

In this blog post, we’ll talk about Airbnb insurance in Canada and your options as a host to protect your home and belongings against damage and yourself against personal liability claims.

You may also want to check out our article where we discuss Airbnb Canada rules to better understand what is expected of you as a member of the global Airbnb community.

Airbnb Insurance for Hosts in Canada: What Protection Does the Platform Offer?

Airbnb offers hosts a “top-to-bottom protection” program called AirCover for Hosts. It’s free and automatically applies to all hosts who list their rental spaces on Airbnb. AirCover for Hosts includes guest identity verification, reservation screening, $3M host damage protection, $1M host liability insurance, and a 24-hour safety line.

AirCover can cover you if something goes wrong and you can’t resolve your dispute with a guest. It allows you to host with a certain level of confidence so you can focus on making your Airbnb stand out and providing a great guest experience. Although managing Airbnb involves a lot of work and can be rather time-consuming, you can make your life easier if you automate your hosting routine using vacation rental software like Hospitable.

Host damage protection covers you if an Airbnb guest damages your home, furnishing, valuables, or belongings during their stay. If the guest doesn’t pay for the damage, you’re reimbursed for it after you submit a reimbursement request to the Airbnb Resolution Center and provide supporting documentation.

Host damage protection also reimburses for extra cleaning services in some instances, for example, removing stains left by guests (or their invitees) or pet accidents. Besides, it covers you for lost income if you need to cancel confirmed Airbnb bookings because of the damage caused by a guest (or their invitees).

Yet Airbnb clearly states that Host damage protection isn’t an insurance policy, and it has certain limitations. Not all damage is included within its terms, so Airbnb recommends you also purchase personal insurance that will cover you for the property damage caused by guests that this program doesn’t protect.

Host liability insurance is also a key component of AirCover, and this program currently extends to Hosts globally, which means that hosts with listings in Canada are also protected. Host liability insurance protects hosts in Canada (as well as co-hosts and cleaners) if they’re found legally responsible for a guest being hurt or their property being damaged or stolen during an Airbnb stay. It also covers you if your guest causes damage to common areas, such as building lobbies and nearby properties.

You need to inform Airbnb and submit the liability insurance intake form. If the HLI program applies to the claim, then, according to the terms, the insurance includes coverage for claim investigation costs, expenses, and costs of defending a formal complaint such as a lawsuit.

Why Do You Need Additional Airbnb Insurance in Canada, and What Are Your Options?

Airbnb offers vacation rental hosts more protection in Canada than other online booking platforms. But while AirCover for Hosts protects you when guests stay at your Airbnb rental, it’s not a substitute for personal insurance. Some gaps in the protection provided by Airbnb could expose you if you don’t have additional cover elsewhere.

You may have home insurance intended to protect you while you’re living in your home by providing coverage for the building and its contents and third-party liability coverage. However, it doesn’t provide adequate protection if you decide to rent your property to someone else, listing it on sites like Airbnb.

If you’re considering turning your home into an Airbnb, you will need insurance beyond your current home insurance policy. You should purchase dedicated short-term rental insurance that provides the same coverage as a home insurance policy, plus additional coverages that only apply to short-term rental properties.

A dedicated short-term rental policy for hosts in Canada may cover the following:

• Damage to your buildings and your belongings
• Intentional acts and criminal acts while your property is vacant (such as vandalism and theft)
• Damage protection from natural disasters (there’s no such thing as Airbnb hurricane policy)
• Loss of rental income (fair rental value)
• Liability coverage from problems regarding a short-term rental

Short-term rental insurance may also cover you if you list your property on other major OTA platforms to reach a wider audience and increase your occupancy rate. And if you opt for Hospitable, you won’t have to worry about juggling calendars, messaging, and cleaners across bookings. You can efficiently manage your Airbnb, Booking.com, and Vrbo listings and your direct booking website from a single dashboard.

Final Thought

Running an Airbnb can be a lucrative side hustle so you need to make sure it doesn’t cost you a lot of money with unnecessary risks. Although Airbnb provides hosts in Canada with protection free of charge, it doesn’t cover everything and doesn’t replace proper insurance for your property.

It’s important to remember that most home insurance policies don’t cover Airbnb rentals. That’s why you should purchase personal insurance to get additional protection against loss, liability, and other risks associated with opening your home to paying guests who stay there short-term. This way, you’ll be able to protect your property and your business if anything goes wrong.

You may also want to check out our article to learn about Airbnb service fee structures in Canada.