July 25, 2013
(Vancouver, BC): More and more Canadians are sharing their homes with others by using websites like Airbnb.ca, Couchsurfing.org, and HomeExchange.com.
In fact, thousands of Canadian homes are listed on Airbnb.com, including:
Square One advises you to speak with your home insurance provider before participating in a home exchange, hosting a guest in your home, or renting out a room in your home. If you don’t, neither you nor your guest may be covered.
“Home sharing programs can be a good way to take an affordable vacation or to earn a little extra income,” says Daniel Mirkovic, Square One’s President and CEO. “But it’s important to keep in mind that all home insurance policies have terms, conditions, and exclusions.”
Adjustments may need to be made to your home insurance policy in order for coverage to remain in place. Even with these adjustments, there are some risks that you may not be able to insure. Here are some things to keep in mind if you’re thinking about participating in a home sharing program:
From a home insurance perspective, home sharing guests are considered boarders, roomers or tenants. If they steal from you or if things “mysteriously disappear” while they are in your home, most policies will not cover you.
Typically, your home insurance policy does not cover loss or damage to the guests’ belongings while in your home. Should something happen to the guests’ belongings, they will need to make a claim against their own home insurance policy.
Intentional damage to your home or belongings caused by the guests is excluded under most policies. While you can attempt to recover directly from the guest, the reality is that you will likely be out-of-pocket for any repairs.
The liability coverage included in your home insurance policy does not extend to the guests. That means if the guests accidentally sets fire to your neighbor’s home while using your barbecue, your neighbor will need to sue the guests and attempt to recover from the guests’ home insurance.
Some policies require you to have separate entrances for any portion of your home that you rent to others. If you’re simply renting a room (or a couch) in your home, it’s important you speak with your home insurance provider or your entire policy could be void.
If you plan on renting out your entire home for a period of time, you will need to switch from a standard home insurance policy to a rental property insurance policy. And, you may want to add coverage for lost rental income due to an insured loss that makes your home uninhabitable.
If you want to participate in a home sharing program, there are a few things you can do to make sure you’re as protected as possible:
Consult with your home insurance provider to make sure you’re complying with your policy’s terms and conditions. Ask questions to fully understand any policy exclusions that may apply.
Properly interview the guests before accepting them into your home. Treat them as you would tenants. Obtain copies of identification, get and check references, and secure damage deposits.
Require guests staying at your home have their own home insurance policies that include personal liability coverage. Get copies of their policies so if something happens, you know where to go.
Check with the home sharing service you are using as it may offer some type of “host guarantee”. Read the guarantee’s terms and conditions as it may offer limited protection.
As more and more Canadians participate in home sharing programs, the insurance industry will likely evolve to automatically include broader coverage. In the meantime, it’s important you take steps to protect yourself. For more home insurance tips, visit our insurance basics and advice section.