News & Resources

Airbnb and Insurance: What You Need to Know Before Renting Out Your Home

March 21, 2019
3 mins
mom and daughter having a playful pillow fight

Homesharing sounds like a great deal for property owners. Who wouldn't want to earn a little rental income through a site like Airbnb or VRBO? It turns out there are many things to think about. Not the least is your home insurance, which may not cover you if those paying guests cause damage.

In order to protect yourself, read your policy and talk to your insurer. You might still participate in the home-sharing industry with a few additions to your coverage.

Home Insurance Is For You -- Not Your Paying Guests

Home insurance assumes you are the owner-occupier of your property. The policy terms are based on residential use of the home. When you list your home on Airbnb, you make commercial use of the space. This in and of itself may be enough to invalidate your home insurance. It's important to note that you don't need to have guests booked in order to violate the policy -- just posting the listing is enough.

Even further, your home insurance won't cover you if you are engaged in illegal activity. "Illegal activity" could mean noncompliance with local regulations that apply to home-sharing. New rules in Toronto, for example, obligate short-term rental operators to have a license and charge tax. Your city's rules should be easy to find, so do some research before hanging out your "for rent" shingle.

Airbnb Offers Insurance -- But It Only Covers So Much

Okay, so what about host protection insurance? This would seem to give you backup in case something goes wrong. But the insurance provided by Airbnb and VRBO is limited. It won't cover the damage made to your home by your guests.

That means your claim will likely be denied if you try to get compensation for losses from a rowdy renter. The nightmare scenario of coming home to find your guest has trashed the suite is when you most want to put in an insurance claim. But even with host protection insurance, that claim is also likely to be denied.

Host protection insurance is designed to cover you in the event you are the subject of a third-party lawsuit. For example, if your guest damaged your neighbour's property, this insurance may apply. Your claim might be denied, however, if the damage was done deliberately. In other words, insurance is useful but only applies in specific scenarios.

Insurance for Homesharing

If you want to join the home-sharing industry, you may be able to get appropriate coverage. Start by reading your existing policy so you are aware of any exclusions. Then, contact your insurer to ask if you can purchase additional coverage to provide a safety net for your home-sharing activities.

If your insurer does not have the right package, or won't sell you one, consider contacting other insurers. Over the past few years, several companies have started selling insurance specifically for home-sharing property owners. This is called "short term rental" or "home-sharing" insurance.

Search Your Home Insurance Options

Whether you're home-sharing, buying a new home or want an update to your insurance policy, you can compare up-to-date home insurance quotes on


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

Latest life insurance articles

How do I know if I need life insurance? A primer for Canadians
Life insurance isn’t a one-size-fits all solution. But if you have dependents, it can be an important financial safety net for those you love.
Learn More
5 mins read
Why life insurance should be part of estate planning for new parents
Life insurance is one of the best ways new parents can protect their family and help loved ones in the event of your unexpected death.
Learn More
5 mins read
10 Myths About Life Insurance Busted – Some May Surprise You
You may be young with no kids and no mortgage. Life insurance is for someone older, who has dependents right? Wrong. Let’s debunk life insurance myths and learn why everyone needs some form of coverage.
Learn More
6 mins read

Subscribe to our newsletter

Stay on top of our latest offers, relevant news and tips!

Thanks for joining!

You'll be hearing from us shortly - stay tuned.