The Commercial Use Coverage You Need
Standard homeowners and tenants policies are designed and sold for personal use, not commercial use. If you rent your property out on a regular basis and your spare room turns into a money printing machine, many insurance companies will consider this a commercial use of the property. Whether it is making changes to your existing policy or adding a home-sharing liability policy, we will help you find the right coverage to help you sleep at night.
Issues with Airbnb Provided Protection
Your landlord will carry landlord insurance to cover the structure you live in, common areas, even liability that could result from an injury claim. This coverage will not extend to your personal belongings or your liability for that matter. If you are already using Airbnb’s services, you may have been coaxed into the false assumption that you are fully covered by them. They offer two forms of coverage: Host Guarantee and Host Protection Insurance:
Included at no cost, Airbnb backs every one of its bookings with its Host Guarantee program. Airbnb claims this program will reimburse eligible hosts for damages up to $1,000,000. That being said, Airbnb will be the first to admit that this isn’t insurance, that it should not be viewed as such and in any way, shape or form, and should not replace or stand in for homeowner’s or tenants insurance. Some issues with host guarantee are:
- A host will have to make a claim on their own insurance policy before host guarantee will intervene
- Any sum collected as a security deposit will be deducted from guarantee
- Will only replace or repair covered property damaged during time of online booking
- Items excluded include cash, collectibles, jewellery, pets, watercrafts or any damage to property that is not considered an accommodation
Host Protection Insurance
This program provides primary liability coverage for up to $1,000,000 per occurrence in the event of third party claims of bodily injury or property damage. You, as a host, need to be skeptical of this as some issues that may arise are:
- Intentional acts that aren’t the result of an accident aren’t covered
- The fine print for this insurance is not readily available for hosts to view. The policy is subject to limitations and exclusions. You may be left open to a coverage gap that you aren’t aware of or you may not know what is covered and what is not covered.
- Personal property of guests is not covered
- Damage caused by guests may not be covered
While the convenience and potential profitability using the services of Airbnb can be enticing, it is not without its faults. Avoid the potential financial fallout of a bad blind date by purchasing the appropriate insurance or updating your current policy accordingly. We’re here to help.