Home insurance advice required

[Cyn]

Hi Rhona,

I would be cautious in accepting what the company says. I looked them up and the insurance company backing them is Mutual Fire which has an A- AM Best Rating so they are financially solid and a registered and regulated Canadian insurance company. However I think these are some of the questions you may want to ask/consider:

• is coverage dependent on how many times the suite is rented out or for longer than certain periods? (e.g. coverage only applies for guests staying longer than 1 month)
• is the coverage contingent upon the guest having their own insurance?
• if there is no property damage to cover the damage guests cause to the suite, where does this coverage get picked up? Does Square One offer first party property coverage?
• what kind of deductibles are available?

I would need to see a copy of the policy to see exactly what they are covering and excluding but the main issue I see is that if they’re not offering first party property insurance coverage, then what happens if a guest burns your house down? Another insurer will likely not be willing to insure you for property & liability because of the Airbnb operations so Square One should offer this so that you’re covered on all bases.

Regarding the waiver, most waivers are actually useless when it gets to court. Signing a waiver unfortunately doesn’t absolve the responsibility of the homeowner’s duties of care towards people coming onto the premises.

Hopefully that helps. Let me know if you have other questions.

[Fendi1]

What I want to add to this is if you have mortgage on your property your mortgage holder absolutely requires you to have your property insured in the event of the fire. If you do not have that -they will pull out your mortgage.

[konacoconutz]

Cyn, as I mentioned in my previous response to you, I had a guest damage a brand new table during a rager they were holding at my studio apartment much to my chagrin. Strangers were invited to my house and attended loud party and with drinking and vaporized pot smoking going on. I called Air while the security breach and rule breaking was going on because I was so distressed and pissed. So my case was already open and they were working with me. Upon check out these guests left a mess but worse, I discovered the damage to the table. Air told me I have to make the claim in the usual way first (confront the guest through their system within 48 hours, provide photos and documentation on how much it would be to replace–just looked up a comparable table online). Of course the nasty guest denied breaking it. “I will not be paying, I didn’t break your table.” and the damage exceeded her deposit. So Air reimbursed me for the table using the online price I got. However I forgot to add the tax! Worse, that kind of table was sold out and there is nothing cheap or easy about buying furniture where I live in Kona Hawaii. You can’t just go down to IKEA and replace it with 100 models to choose from. It’s still broken and I don’t have a replacement.

Yes, Air were good, and right on top of this situation, which they called very serious. Reimbursed me. It still doesn’t make up for my damaged peace of mind, the hours I spent assembling the broken table to begin with, and assorted other troubles regarding this guest. If I’d had to do over, knowing what I know about this guest, I would have told her to take her measly $467 elsewhere.

[Susanne_Lee]

What a mess! I have just booked my first airbnb hosting gig. I innocently called up BCAA (in Canada) to inform them. They inform me not only am I not covered during the airbnb stay (I didn’t have high hopes on that one), but they were cancelling my whole policy immediately. They won’t allow me to have ANY insurance with them, if I do airbnb. So now I need to choose: “risk” it with airbnb and find another provider for the non-airbnb days, or cancel on my reservation. This is awful!

[Joshot15]

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[cs2015]

My homeowner’s insurance immediately cancelled on me when I stupidly told them I was running an AirBnB and just to rub it in they said no one would ever insure it. But I did find an insurer named CBIZ. They are based in North Dakota. Yes, they are twice the cost of ordinary homeowner’s insurance. They cover Homeaway.com and what I technically have now is vacation insurance. Are they legit? I have no idea and hope I never have to make a claim. In any case, if your homeowner’s insurance found you trying to make a claim for hosting an AirBnB guest, they wouldn’t cover it anyway.

[Rhona]

Susanne, I went through agonies when my insurer (Coast Capital) sent me a letter asking me the particulars of my rental situation. (I have a self contained suite in my basement) So I came clean with them and was told that it would probably not be possible to have coverage, and they’d call me back when they spoke to the underwriter, but they never did. So I found an agent in Victoria (Thunderbird) who gave me a comparable package for a little more money. Then after all that was settled, I got an offer from Coast Capital, offering me continued coverage! So I’m encouraged to know that the insurance industry is beginning to get it. Not sure what your setup is like, so this may not apply to you. A friend who has similar setup to me is with BCAA; she didn’t use the word “Airbnb” but she did say she had short term lets and they put it through. But my agent said BCAA wasn’t on board with it.

[Cyn]

Rhona I have to say I’m surprised that Coast Capital agreed to keep insuring you after knowing about Airbnb. The issue with insurance policies is that you never know what will happen in the event of a claim. An insurance policy is not a guarantee to pay claims; the insurer has to determine (in their opinion) whether you have coverage and whether you were within the confines of your insurance policy. But I am happy to see that with companies like Square One, there is a wave towards recognizing that there’s a gap in the market for these kind of coverages/policies.

[GTMWP1]

Hi Rhona,

thank you so much for this post. After reading it, I did a little research and then called Square One. I am really pleased to report that we now have proper insurance in spite of our airbnb hosting activity and that my insurance is roughly the same cost as it was before (with TD bank’s insurance company Meloche Monex). The coverage and deductibles seem very reasonable to me given the risks associated with short-term rentals (us airbnb hosts are allowing strangers into our homes, after all).

So for all of you in Canada, Square One is a seemingly good option (and one of the few) for Airbnb hosts. Furthermore, based on reviews I found online they seem to be a fair and cooperative company should you ever need to make a claim. Just be prepared for a high deductible for theft ($2500 in my case).

Happy hosting everyone.

[allan_vcr]

In Vancouver, Square One Insurance offers homeowner insurance that allows short-term rentals. All they do compared to other insurance companies is increase the theft and vandalism deductables, but the offer other coverage areas that may offset this.

I don’t know if they offer this across Canada or not.

[Richard_Silver]

I’ve recently taken some interest into this topic and talked to a person from the Insurance Bureau of Canada and also a few property owners who have had bad experience.

The main thing is talk to your insurance provider if your renting out your property to strangers. Otherwise you’re risking a lot of money. And, as a lot of answers already point out here, AirBnb will not protect you from liability, so if you’re looking to stay in this business for a longer time - really do consider adjusting your insurance policy. Don’t be reckless.

[joshlilien]

Hey all,

We definitely hear your concerns! In our own listings, we were dealing with the same stuff.

When Flatbook takes over you rental in our Hosting Services, we offer up to $2 million in coverage, just by signing up.

It’s a revenue sharing model (with no up front cost), and we handle everything involved. So you can just sit back, and collect a check every month. We handle pricing, checkins, furnishing, cleaning, 24/7 support, and of course insurance.

Check out www.flatbook.co/hosting to find out more! You can also message me directly for tips and tricks, I’m always happy to help

Josh

[Billy_Bob_Merkowitz]

It’s a revenue sharing model (with no up front cost), and we handle everything involved. So you can just sit back, and collect a check every month.

I’m SOLD Josh Lliien. You don’t need to say another word. I’ll just sit back and wait for my check. I’ll be here till six…

[mgyori]

Yes, Square One seems like a good option in Canada. I just contacted them and their initial quote was quite good ($72/month). But they stress a caveat that their insurance does not cover intentional damage. So if an AirBnB guest intentionally burns your home down, you get nothing… But does regular insurance cover intentional damage?

As it is, with my duplex situation (shared wall), I’ll have to get special insurance for my neighbours as well.

[mgyori]

Actually, Square One may not be a good option. They insist on an coverage exclusion stating they do not cover water damage when the home is not occupied… so unless you have guests every single day of the month, you are vulnerable to water damage from leaks… which seems ridiculous to me. At this point I cannot recommend Square One. Still looking…

[diamond54]

If you do find insurance expect it to be a 400% increase over what normal HO insurance is. This is where airbnb needs to step up to the plate to try to help fill this void; we need companies to provide a reasonable price for insurance;most of us are riding bareback and taking a risk due to extreme high cost of insurance. What I find laughable is that airbnb guests are a MUCH lower risk than regular tenants!! I am a landlord, renting for over 30 years and I can tell you tenants are way more of a risk; I have have 4 insurance claims on “regular tenants”; I would rent to airbnb people ANY day.

[Rory]

Agree, Diamond. We just started an airbnb house for/with our daughter in Philadelphia. We’re super hosts. the Home owners insurance on our daughters’ house was cancelled with one month notice because she was running a business. I spent hours today trying to get replacement coverage. Finally found Liberty Mutual who was willing to write a $4K/year policy but only for 4 boarders (she has a 7 bedroom house that is always full). She lives in a university town and every house on the block has at least 6 adults living there. The actuarial data for airbnb supports a reasonable homeowners rate. Airbnb itself was not helpful, claiming to not have heard of this problem before (really?) How can we leverage our voice as hosts to help address this problem?

[diamond54]

when it hurts THEIR pocketbook they will do something; when hosts STOP hosting because of the high cost and they lose revenue they might do something or when lawsuits start to happen when owners do not have the proper coverage and get sued and airbnb gets sued. Let’s face it; most of us are riding bareback and are taking a risk. Its absurd to charge an extra $400 a mo for insurance(if you can even find it). Their airbnb insurance is useless if someone trips and breaks a leg; it only covers damage to the property.

[CasaCadora]

We signed up with CBIZ. Reasonable premium, covers property damage and host liability specifically for STR. Google them and you’ll find it.

[danhodder]

Hi, We’ve been hosting with AirB&B for a year and have just changed our home insurance. My wife and I simply rent out our double room however we found Towergate B&B insurance who over the phone where willing to insure us on our AirB&B venture under their B&B insurance. It took a good deal of searching and calling around however our final quote was only £56 more than our normal home quote without AirB&B using price comparison sites. Clearly explained the whole process to the guy on the phone and while he had to check with the underwriter we got it cleared and explicitly stated on the document and on the recored phone call that they would cover AirB&B.

I started our search with a very helpful contact in Salisbury http://www.annettsandorchard.co.uk/ who found an underwriter willing to cover AirB&B. Following this I then shopped around and managed to get an improved offer for similar cover at a slight discount with Towergate.

I should add this is in the UK.

Hope this helps,

Dan