Cover your back before renting your home on Airbnb

Looking to rent out your home, condo, apartment or room on Airbnb or similar sites? Call your insurer to avoid financial disaster.

According to a 2016 survey by the Chamber of Damage Insurance (ChAD), one in two Quebecers who rented their apartment on this platform did not notify their insurer. I would be surprised if this fact has changed.

However, if you rent your property on Airbnb, your insurance contract specifies that you must notify your insurer.

Essentially, home insurance (and, by analogy, car insurance) is designed to meet the individual needs of the insured. Renting on Airbnb (or Uber) is considered a commercial activity: the insurer sees it as a different risk.

A question of frequency

In Quebec, a standard home insurance contract means you can still rent out your apartment, but for a maximum of 30 days a year, consecutively or not. An insurer can extend this period if it wishes.

Indeed, the insurer must consider that this activity should not recur. So there’s a world of difference between permanently showcasing your accommodation on Airbnb and renting it out for skiers on the weekends or for a month while you head south.

In fact, every insurer will perceive short-term rental risk differently. However, if you rent on Airbnb, expect to pay more for insurance. You can always negotiate with your insurer to get the coverage (and a rate) that best suits your rental pattern (frequency, season, duration).

Always check and report

A word of advice: neglecting to notify your insurer should be avoided at all costs, because if he discovers that you have rented a property on Airbnb, in case of a claim (fire, theft, vandalism, break-in, bodily injury) or to insure yourself.

On the other hand, many condominiums prohibit short-term rentals, especially for insurance and quality of life issues. Contact your condominium association. Also, a cottage does not have insurance coverage like a home or condo. Some insurers are strict about hiring.

Finally, Airbnb cautions that its warranty does not replace conventional home or civil liability insurance related to a property.

Advice

• Some insurers offer a specific insurance product for apartments rented on Airbnb.
• Renting on Airbnb is considered taxable income. Tax authorities inspect rental sites.
• Municipal regulations regarding rentals on sites like Airbnb vary from one municipality, city or neighborhood to another. Check if it’s allowed in your area. In the event of a claim, an insurer won’t refuse to indemnify you because regulations prohibit short-term rentals, but you expose yourself to government assistance. These have tightened regulations since the tragedy of Old Montreal.
• Are you tenants? Generally, your lease and your home insurance do not allow you to rent your accommodation on Airbnb.