Home insurance cancellation

My broker has informed me my house insurance will be canceled if I continue to run an airbnb. My cousin was told the same. We live in Nova Scotia. The company does nof care that airbnb has guest insu rance. After some research I have discovered this is a very big problem every where. Advice?

You have to purchase commercial insurance it’s about 400% higher than what you pay now. This is where Airbnb drops the ball they should be able to provide a insurance carrier that will ensure Airbnb hosts.The funny thing is I feel it’s a lot more risky to be a long term landlord at least in my experience. Long-term tenants tend to do much more damage than a short term guessed that doesn’t want to blow their good reviews

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Thanks for confirming. This is what I feared. My house insurance is about 500$ a year. My broker said I would have to pay 1000$ for 6 months (we have a ferry that brings guests from the USA may to October ). I guess I will have to do this and see if it pays off. Airbnb needs to get onto this now.

Hi Robyn, How did your broker/insurance company find out you were running a bnb?

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Hi Nancy: It was through serendipity. My cousin was called by HER broker and warned that if she continued her home insurance policy would be void. We live in a small town where everybody knows everybody. I am happy about it only because I don’t like bad surprises.

Oh, and it was because a friend of the broker had been looking for an airbnb room and recognized my cousin’s listing.

Thanks. So very interesting. I guess the broker had a duty to report it.

My business policy was only 2x as much.

We took the Ferry to Yarmouth for a family reunion in Nova Scotia 2 years ago. Loved it. Are you in Yarmouth?

Sorry to be the wicked witch from the west but this just isn’t possible. Every host should ensure that they have their own insurance in place. Yes, it’s not cheap (and should be factored in to the rental rate) but nevertheless it’s an essential part of doing business.

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Robyn, I will say that it was fortunate that your broker found out and informed you. I say this again and again but it bears repeating over and over - do not lie to your broker and insurance company about running an Airbnb. If your insurer is NOT okay with this risk (and most likely won’t be), you need to find an insurance company that completely understands the entire Airbnb exposure and are okay with covering it. For all those hosts out there that are keeping quiet and not informing their broker/insurer of their Airbnb operation because they think that they are still covered as long as the insurance company hasn’t said anything, this is absolutely not true.

This is considered a material change in risk and is also in the grey area of being a commercial exposure so if your insurance company is not aware of the risk and you suffer a loss, your insurance company can (and most likely will) deny your claim because they will claim that you didn’t inform them of what the property was being used for and it’s nothing something they would have been okay with covering.

I work in the insurance industry and have seen this happen numerous times before. Do not let this happen to you! As Robyn was smart to do, consider a commercial policy. They will usually cover Airbnb operations and although they will be more expensive with higher deductibles, the peace of mind that comes with knowing that in the event of a loss you’re covered is priceless. Please make sure you have a policy with both property and liability coverage as the last thing you want is for a guest to trip and fall on your stairs (i.e. elderly people during the dead of a Canadian winter) and sue you when you have no liability insurance in place to pay for defence costs or to cover any claims.

Robyn, Airbnb does have host insurance but the question is whether or not the policy would actually cover a host in the event of a claim so it’s absolutely essential that you have a primary policy covering you as a host.

Disclaimer: I’m not an insurance broker and this in no way is to be taken as professional advice. This is only my opinion and experience.

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The issue is folks who jump on this bandwagon thought airbnb insurance covered everything. This is a warning thst indeed you are opening a bed and breakfast the same as any other. None of my contacts were aware and I am now making them aware. If I had started a b n b myself I would have known to buy commercial insurance. Now I know thete is no difference and I want my friends to realize this as well.

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Also when I called airbnb on this topic they were shocked to find out my hone insurance woukd be canceled ans j had to buy commercial insurance. I was told they never heard of this problem…until I sent them threads of conversations about it.

Thank you! Your reply is much appreciated!

Yes! I am in Arcadia.

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A very valid point indeed. Hosts would be wise to assume that Airbnb covers nothing and that they have to stand on their own two feet. Certainly, sometimes hosts are able to claim from Airbnb but it’s sensible to assume that even if they do, it will be time-consuming and you’ll have to jump through many hoops.

We had a similar problem a year ago when we reviewed our coverage with our agent and found that the agency would not be able to cover short term rentals. Fortunately, after much searching we found out that Lloyds of London would write a reasonable policy for us. Good luck on finding a company that will fit your situation.

My insurer covers me for home rental. It is a small company based in the Saratoga / Capital District of New York State called Sterling Insurance and the close by Adirondack Mountains have a long history of owners sharing / renting their camps and cottages. They have been offering this kind of policy for a long time. I, however, offer a whole house rental, but we occupy the property more than we rent.

TOTALLY disingenuous of Airbnb. Shame on them. This has been around for YEARS.

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It could just be that the particular rep had never heard of it. I don’t think the concept of Airbnb as as organization that one is communicating with is accurate any longer, if it ever was. The reps seem quite disconnected from each other. And I suspect internal communication is poor. None of which is surprising for a big company with a lot of traffic, and a focus on the bottom dollar.

My commercial insurance from Proper was about 150% of my homeowners. But I also had to find a different more $ landlord policy for my long term term rental as it was no longer bundled with my homeowners.