Airbnb Does Not Mix Well With Insurance, Unless…

You probably already know how this works, but if not, let me summarize it for you: At the moment, apps and Web sites that enable you to generate income with your vacant residence are trendy. Airbnb, the best-known company and possibly the most effective in the field, might help you discover new places around the world as part of your next vacation. Meanwhile, you could pay for part of your trip by renting your house in say, Laval, to another user who wants to visit family.

This service is generally easy to use, affordable, and technologically advanced, hence its success. The good thing about this method is that, if you report your income, it’s perfectly legal. Depending on the province, you may need to contact the ministry of tourism to find out if you need a permit to rent your place for a few days or weeks per year. This sums up the legal aspect.

However, when it comes to insurance, it is reasonable to assume that complete strangers visiting a house pose a greater risk for the insurer than the family that has been insured for several years. Therefore, you should notify your insurer; especially given that if you read through your insurance contract, you will usually find the following text (with very similar wording):

Common exclusion: The insurer shall not cover claims arising from the insured premises being used, in part or in whole, for business purposes known by the insured, but that were not reported as part of the special conditions. Business refers to any ongoing or regular pursuit undertaken for remuneration including a trade, profession, or occupation, or the rental of buildings.

In short, here is a striking example: you will not be covered if a fire breaks out in your home while it is rented on a short-term rental site. Good to know, right?

So, whether you only rent your home a few times a year or you have determined that renting your condo on a weekly basis is more profitable and less risky than leasing it for a one-year term, be aware that you must notify your insurer to obtain consent.

The catch is that few insurers will grant your request, unless you call your Lareau broker. We have agreements with insurers that will accept your request. Their pricing will be different, but will pale in comparison to the risk you would be taking if you rented your home without the proper insurance…

Finally, if you want to use Airbnb to travel the globe without renting out your home, take the appropriate precautions and stick to the clauses in your insurance contract. Nevertheless, your personal liability insurance will automatically cover you, anywhere in the world, for any damage that you may incur to the house you rent during your vacation.

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