Renting Out Your Place on Airbnb? Check Your Home Insurance First

Renting out a basement suite, a spare room or your whole home while you travel can bring in good income. But the moment a paying guest walks through your door, your home insurance may stop working the way you think it does.

Does home insurance cover Airbnb in Ontario?

Usually not on its own. A standard home insurance policy assumes you live in the home and use it as a residence. When you rent it to short-term guests for money, insurers treat that as a commercial activity, which most home policies exclude or limit.

That means if a guest damages your home, steals your belongings, or gets injured and sues you, your claim could be reduced or denied. In some cases, an insurer could deny a claim even for an unrelated loss if it learns the home was being used as an undisclosed short-term rental.

What about Airbnb's AirCover?

Airbnb provides hosts with protection called AirCover, which includes damage protection and liability coverage. It's a helpful backstop, but it isn't a replacement for proper insurance:

• Airbnb itself states that its host damage protection is not an insurance policy.
• It applies only to Airbnb bookings, not VRBO, Booking.com or private rentals.
• It has conditions, limits and exclusions, and you'll typically need to document damage and file within tight time limits.
• It doesn't cover the gaps in your own home policy, like lost rental income or damage that happens between guests.

Your options for proper coverage

There are two main ways to insure a short-term rental:

1. A home-sharing endorsement. Some insurers let you add short-term rental coverage to your existing home policy. This often suits occasional hosts who rent a room or their home a few times a year.
2. A dedicated short-term rental policy. For frequent hosts or properties you don't live in, a standalone policy built for short-term rentals usually offers broader protection, including liability, guest damage and loss of rental income.

Which one fits depends on how often you host, whether you live in the home, and whether it's a house, condo or secondary property. Not every insurer offers both, which is where an independent broker helps.

Other things to check before you list

• Your municipality's rules. Many Ontario cities regulate short-term rentals. Toronto, for example, only allows them in your principal residence and requires registration. Check your city or town's bylaws before listing.
• Your condo rules. Many condo corporations restrict or ban short-term rentals in their declaration or rules.
• Your mortgage or lease. Some mortgages and most leases have conditions about renting out the property.
• Taxes. Short-term rental income is taxable, and HST can apply once your revenue passes the CRA's small supplier threshold. Talk to your accountant.

Frequently asked questions

Will my home insurance cover damage caused by an Airbnb guest?

Often not, unless you've told your insurer and added short-term rental coverage. Most standard home policies exclude or limit losses connected to renting your home for money.

Is AirCover enough insurance for Airbnb hosts?

AirCover is useful extra protection, but Airbnb says its damage protection isn't an insurance policy, and it only applies to Airbnb bookings. Most hosts should still have their own short-term rental coverage.

How much does short-term rental insurance cost in Canada?

It depends on the property, how often you host, your location and the coverage limits you choose. An endorsement on an existing policy often costs less than a standalone policy. A broker can compare quotes for you.

Do I need to tell my insurer if I only rent occasionally?

Yes. Even occasional short-term rentals can affect your coverage. Always tell your insurer or broker before you host.