Despite the nightmarish stories about Canadian Airbnb guests who destroyed their hosts’ homes and property, many users of the service remain improperly insured for rental business.
For this reason, consumers celebrated the news that Airbnb now offers its Host Protection Insurance program, which now includes liability insurance in addition to covering damages, to 15 additional countries, including Canada.
While it’s hard to analyze Host Protection since the company doesn’t provide extensive details about it, some brokers feel that it shouldn’t be considered an all-inclusive solution.
“In actuality, they’re providing what would typically be available already” said Daniel Mirkovic, co-founder and president, Square One Insurance. “It seems to be premises liability coverage, which would normally be included in the host’s own home insurance policy.”
Mirkovic says it’s “tough to say” whether that makes the Host Guarantee Insurance program redundant, but it may at least fill the gap for hosts whose insurers do not offer premises and liability coverage.
“In our case, it’s redundant if they’ve disclosed that they’re participating in home sharing programs like Airbnb, because they’d already have this protection,” he said. “But Airbnb is recognizing that not many home insurance providers are extending that coverage to short-term rentals or home-sharing programs.”
Moreover, Mirkovic points to essential exposures that the Host Protection Insurance program may not safeguard.
“What this doesn’t protect against is if a guest, while visiting the home, accidentally causes damage to your personal property or belongings,” he said. “If the guest is in your kitchen preparing a meal and leaves a pot on the stove, gets distracted and causes a fire that burns down the kitchen, that’s not covered under this, nor is it covered under Host Guarantee.”
On the contrary, that would fall under the guest or tenant’s home insurance policy, which demonstrates an important lesson for home sharing hosts: always seek the guest’s insurance information prior to a rental.
“If you’re renting out your home to others, one of the most important things to ask is whether they have home insurance or tenant or renter’s insurance. Ask for the policy number and who their insurance provider is, in case something happens, you might be able to recover against them as well,” he said.
In the kitchen example, once that guest accidentally burned down the kitchen, the host may be able to collect from the guest’s personal liability insurance.
In order to be fully protected, then, Mirkovic recommends combining Host Guarantee with a comprehensive home insurance supplement for Airbnb users.
“I think our policy is superior to what they’re offering because theirs has no accidental damage to the host or landlord’s property, and that’s important to have. But it works well with the Host Guarantee, because we cover accidental damage, and Host Guarantee covers intentional damage.”
Still, he considers Host Guarantee “great” and acknowledges its virtues.
“Host Guarantee is critical, because no insurance company is going to cover intentional damage. It’s always accidental damage,” Mirkovic said.