Thinking Airbnb? Check your coverage

Listing a spare room or apartment on Airbnb may seem like a great way to earn some extra cash, but homeowners should check their coverage before taking the plunge.

Listing property on the popular home sharing site can change a homeowner’s risk profile – with even Airbnb itself encouraging homeowners to purchase separate insurance in its terms and conditions.

According to Amanda Dean at the Insurance Bureau of Canada, the vast majority of property insurance policies don’t expect homeowners to allow complete strangers to stay in their home without them being present. But that coverage and those rules can cease to apply the moment that the homeowner vacates the premises and leaves it in the hands of others

It’s important for homeowners to talk to their broker before listing their property. If you’ve insured a home as a private dwelling and you’re going to, you know, offer some rooms on Airbnb, you’re changing the risk profile and that affects how the thing is underwritten.

Some insurers already see the need for a special kind of insurance that covers home sharing hosts. With some insurers and brokers offering tailored add-ons to policies, IBC’s Dean said that a full commercial policy isn’t necessary.

Dean added that the insurance industry has caught up very quickly with the advent of Airbnb and recognize fully that not everyone who offers their home to visitors through Airbnb is doing so 365 days a year. People may opt to do it for a couple of months of the year, so a full commercial policy may not be what is needed.

Before you decide to let strangers take over your home for a brief period, check with the brokers and CSRs at DPM Insurance Group to ensure you’re not caught unprepared… and uninsured, if your guests cause significant damage.

Source: Duffie Osental, for Insurancebusinessmag.com