You’re going on vacation for a few weeks and you would like to cover some of your expenses by renting out your home on the Airbnb platform? Assurances Multi-Risques would like to give you a few pointers on short term property rental and its effects on home insurance.
Renting your home on Airbnb can be risky if you omit to report this to your insurer or insurance broker. Indeed, your insurer could refuse to cover you in case of damages occurring while your house was rented out on a short term lease or through the Airbnb website.
Why is it better to inform your insurer or insurance broker of rental activities?
We strongly recommend that you contact your insurer or insurance broker if you are planning to rent your home on a short term basis, since professional activities such as that are generally automatically excluded from normal home insurance contracts. Therefore, please don’t omit to contact your insurance specialist when you are planning to rent out your home in the hope of saving on your home insurance premium! Your insurer could refuse to cover you in case of a claim, and could even decide to stop insuring you altogether. You will then have to find a new insurer willing to cover you for short term rental activities. Opt for the worry free solution. Accept a small extra premium in order to adequately protect your biggest asset, i.e. your home or your condo.
About the Airbnb insurance plan
Some people think that it’s not necessary to report their rental activities to their insurer since Airbnb has an insurance plan. In fact, Airbnb offers a host guaranty, which is a supplementary insurance plan. Such plans offer a certain degree of coverage, but are not enough to meet the needs of a person renting his/her home on a short term basis. For instance, the host guaranty offered by Airbnb does not carry the property’s replacement cost, but rather its actual value (depreciated). That means that you could be shouldered with a financial loss in the event of a problem if your regular insurer refused your claim stating that he had not been informed of your rental activities. Moreover, Airbnb’s host guarantee states that it will cover damages caused by the person who has rented the property. Therefore, in the event of a fire caused by an electrical problem or of a sewer backup, Airbnb will not cover you, and you will have to submit a claim your regular insurer. This is why, among other things, you must disclose your short term rental activities to your insurer. You should also be warned that Airbnb’s host guarantee does not include any civil liability clause.
A few practical tips when renting your home on Airbnb
- Store your valuables in a safe box or, at least, in a safe place.
- Be selective when renting your home. Arrange interviews with potential renters to get to know them better and do a security check on them if deemed necessary.
- Ask a neighbour to unobtrusively check your residence and to pick up your mail. By doing this, you make sure that your home is always looked after.
- Provide the person who is renting your place with the phone number of someone you trust (your neighbour, for example) in case there is a problem.
In conclusion, we suggest that you contact your home insurer if you are planning to offer your home on a rental platform such as Airbnb. A simple call to your insurance broker could spare you a lot of trouble, and address certain concerns that you may have concerning short term rental activities. Your travels will be so much more enjoyable!