Short-Term Property Rentals and Home Insurance: What You Need To Know

There are several reasons why you might want to rent out your house, condo, or cottage on a short-term basis through an online platform such as Chalets au Québec , LesPAC , Kijiji , Homeaway , and, of course, the well-known Airbnb *.

Whether financial reasons or a prolonged absence prompt you to rent out your home for a short period of time, this will have an impact on your home insurance. In this article, Assurances Multi-Risques explains what insurers consider to be a short-term rental and how to properly insure your property while you are away.

*Airbnb ne sera pas abordé dans cet article, comme un article sur le sujet a déjà été publié. Nous vous invitons d’ailleurs à le consulter.

What is short-term rental for a home insurer?

Each insurer has its own definition of a short-term rental. The duration of a short-term rental may vary from one insurer to another, but generally, to be considered short-term, a rental must last from one day to less than one year.

Néanmoins, peu importe la durée de la location prévue, le plus important est de prévenir votre assureur habitation ! Puisque si vous omettez de déclarer cette activité, votre assureur pourrait refuser de vous indemniser en cas de réclamation. En effet, la location d’une résidence est considérée comme une activité professionnelle puisqu’elle génère des revenus… et les activités professionnelles sont exclues de la majorité des contrats d’assurance habitation !

How to insure your home during short-term rentals?

Comme mentionné, la première chose à faire pour bien assurer votre résidence pendant sa location de courte durée est de contacter votre compagnie d’assurance. Ne soyez pas surpris, il se peut que votre assureur refuse de continuer de vous couvrir… Si cela se produit, nous vous conseillons fortement de contacter un courtier d’assurance ayant une expertise dans l’économie de partage et dans la location à court terme. Il se chargera de magasiner votre assurance habitation à votre place et dénichera une couverture adaptée à votre réalité au meilleur prix, et ce, sans que vous deviez multiplier les appels.

In addition, some insurers may agree to continue covering you by adding an endorsement and the words “Short-term rental of your residence” to your specific conditions. If this is the case, we strongly advise you to also add rental income loss coverage. This way, if your budget is calculated as if your residence were rented X days per year and it burns down, you could be compensated for the loss of rental income.

However, the most important thing to ensure your property is properly insured during a short-term rental is that your insurer is aware of this activity and that you have written proof. Written words remain, spoken words fly away…

In conclusion, renting out your house, cottage, or condo on a short-term basis can be a very attractive source of additional income and allow you to treat yourself… unless a disaster occurs without you having notified your insurer of this activity! In that case, they may refuse to compensate you. So before you embark on this adventure, don’t forget to notify your insurance company. Also take the time to assess the additional costs to your home insurance and contact an insurance broker to check the profitability of your project.