Participating in a home exchange, hosting a guest, or renting out a room? Speak with your home insurance provider or you may not be covered.
VANCOUVER, July 25, 2013 /CNW/ - More and more Canadians are sharing their homes with others by using websites like Airbnb.com, Couchsurfing.org, and HomeExchange.com. In fact, thousands of Canadian homes are listed on Airbnb.com, including:
- 2,487 in Vancouver, British Columbia;
- 2,338 in Toronto, Ontario; and,
- 6,330 in Montreal, Quebec.
Square One advises you to speak with your home insurance provider before participating in a home exchange, hosting a guest in your home, or renting out a room in your home. If you don't, neither you nor your guest may be covered.
"Home sharing programs can be a good way to take an affordable vacation or to earn a little extra income," says Daniel Mirkovic, Square One's President and CEO. "But it's important to keep in mind that all home insurance policies have terms, conditions, and exclusions."
Adjustments may need to be made to your home insurance policy in order for coverage to remain in place. Even with these adjustments, there are some risks that you may not be able to insure. Here are some things to keep in mind if you're thinking about participating in a home sharing program:
From a home insurance perspective, home sharing guests are considered
boarders, roomers or tenants. If they steal from you or if things
"mysteriously disappear" while they are in your home, most policies
will not cover you.
Typically, your home insurance policy does not cover loss or damage to
the guests' belongings while in your home. Should something happen to
the guests' belongings, they will need to make a claim against their
own home insurance policy.
Intentional damage to your home or belongings caused by the guests is
excluded under most policies. While you can attempt to recover directly
from the guest, the reality is that you will likely be out-of-pocket
for any repairs.
The liability coverage included in your home insurance policy does not
extend to the guests. That means if the guests accidentally sets fire
to your neighbor's home while using your barbecue, your neighbor will
need to sue the guests and attempt to recover from the guests' home
Some policies require you to have separate entrances for any portion of
your home that you rent to others. If you're simply renting a room (or
a couch) in your home, it's important you speak with your home
insurance provider or your entire policy could be void.
- If you plan on renting out your entire home for a period of time, you will need to switch from a standard home insurance policy to a rental property insurance policy. And, you may want to add coverage for lost rental income due to an insured loss that makes your home uninhabitable.
If you want to participate in a home sharing program, there are a few things you can do to make sure you're as protected as possible:
Consult with your home insurance provider to make sure you're complying
with your policy's terms and conditions. Ask questions to fully
understand any policy exclusions that may apply.
Properly interview the guests before accepting them into your home.
Treat them as you would tenants. Obtain copies of identification, get
and check references, and secure damage deposits.
Require guests staying at your home have their own home insurance
policies that include personal liability coverage. Get copies of their
policies so if something happens, you know where to go.
- Check with the home sharing service you are using as it may offer some type of "host guarantee". Read the guarantee's terms and conditions as it may offer limited protection.
As more and more Canadians participate in home sharing programs, the insurance industry will likely evolve to automatically include broader coverage. In the meantime, it's important you take steps to protect yourself. For more home insurance tips, visit www.squareoneinsurance.ca.
Established in 2011 and based in Vancouver, British Columbia, Square One offers the only home insurance policy in Canada that can be personalized to your unique needs. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake, sewer backup and broad water protection in its policies. For more information about Square One, or to get an online quote, visit www.squareoneinsurance.ca.
SOURCE Square One Insurance Services Inc.