Airbnb 'Host Guarantee' policy not actually insurance, warns broker
Homeowner John Kidder cancelled his listing after insurance broker threatened to revoke coverage
Airbnb may seem like an opportune way for homeowners to make some extra cash, but one homeowner is warning others about potential insurance pitfalls that come with leasing out your place for a low price.
After reading about Dany Papineau, who claims to have made a fortune through Airbnb, John Kidder contacted the CBC to say he cancelled his own listing when he was told his insurance would be revoked if he continued using the service.
"[The insurance broker] said homeowner insurance, the general kind, does not, under any circumstances, cover short-term rentals — that's considered a commercial risk," Kidder told The Early Edition.
"And she did not know any insurer on a normal home insurance policy who would cover that risk, period."
Rich Seto with Reliance Insurance Agency says most insurance companies would not cover a homeowner who uses Airbnb.
"These are mainly short-term rentals and they're so transient in nature," Seto said. "The main concern with the insurance companies are one, the liability exposure, and two, they're concerned about things like theft and vandalism."
Daniel Mirkovic, with Square One Insurance Services Inc. says he believes his company is the only one in Canada that does cover those participating in home exchange programs.
"You'll be paying a slightly higher rate for the additional risk of having people unknown to you residing in your living unit," he explained. "There is a higher deductible that is applied for crime-related losses like mysterious disappearance."
Airbnb recently rolled out a million-dollar liability insurance program for hosts, but it's only offered in the U.S.
Other people in countries such as Canada can turn to something called the Host Guarantee, which promises to reimburse hosts for up to $900,000 in damage to their eligible property.
However, Seto warns, the policy is subject to terms and conditions, and — as pointed out by Airbnb itself — the Host Guarantee is not actually insurance.
It doesn't cover things like cash and securities, pets or certain types of property like jewelry and artwork.
Seto encourages Airbnb hosts to consult their insurance brokers, but he acknowledges that other than screening guests, there's not much they can do to protect their property.
"They're between a rock and hard place," he said. "There's not a lot of coverage out there."