If you rent out a property in Ontario, having the right protection is essential. Whether it is through Airbnb or a long-term rental, the right insurance is crucial to ensuring your property remains safe.
The biggest difference between Airbnb insurance and landlord insurance is the type of rental they cover. Airbnb insurance is designed for short-term rentals with frequent guest turnover, while landlord insurance protects properties rented to long-term tenants under a lease. Choosing the wrong policy could leave you with coverage gaps or denied claims.
What Is Airbnb Insurance?
Airbnb insurance exists specifically to protect properties that are rented out on a short-term basis to various guests. In most cases, it will focus on risks such as guest-related property damage, liability claims during stays, and gaps left by Airbnb’s host protection program. If you’re renting your home on Airbnb, you will need home insurance, as your standard home insurance policy may not cover home-sharing services like Airbnb rentals.
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What Does Airbnb Insurance Cover?
Airbnb offers its own form of insurance. This is known as AirCover. When you rent your home through Airbnb, AirCover will automatically provide you with some insurance coverage. AirCover will cover you for the following:
- 3$ Million USD in damage protection: This will cover most damage caused to the property by any of your guests. This will include pet damage, deep cleaning and replacing any lost valuables.
- $1 Million USD in third-party liability: This will assist you in situations where a guest gets injured on your property. Alternatively, if their belongings get damaged or stolen.
What Does Airbnb Insurance Not Cover?
Unfortunately, the cost of injuries can sometimes exceed the $1 million amount in liability coverage. In most cases, your primary home insurance policy will protect your building, its contents and third-party liability. However, when your place is listed on Airbnb, it changes how you use it. This will affect your coverage. AirCover provides some protection, but gaps remain so that you may need additional Airbnb insurance for full coverage.
For example, if a fire starts in your dryer while a guest is using it, Airbnb could argue that it is not the guest’s fault but rather the equipment’s. This is one of the many examples of gaps in Airbnb’s AirCover.
When Should You Get Airbnb Insurance?
You should acquire Airbnb insurance if you:
- Rent your property out on a short-term basis (nightly, weekly, or monthly stays)
- List your platforms on sites such as Airbnb or other similar vacation rental sites
- Regularly host changing guests instead of long-term tenants
- Want protection against risks such as guest damage and liability.
In many cases, landlord insurance won’t cover situations where you are providing a short-term rental. This is because it assumes long-term tenants and infrequent guest turnover, and some property owners may need Airbnb insurance if their situation is unique.
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What Is Landlord Insurance?
Landlord Insurance, also known as Rental Property insurance, protects your rental property around the clock. Though the specifics of a landlord insurance policy may vary, it is generally similar to your standard home insurance policy. The one main difference is that it is tailored to a rental unit and will not replace Airbnb insurance if you rent short-term.
What Does Landlord Insurance Cover?
Landlord insurance helps protect you from risks such as property damage, liability claims, and loss of rental income. Before you welcome tenants, it’s important to understand how this specialized coverage works and why it differs from standard home insurance. Unlike Airbnb insurance, landlord policies are for long-term rentals.
- General Liability Insurance: The most common part of landlord insurance is liability coverage, which pays for physical and legal costs if someone gets injured or causes damage while on your property.
- Contents Insurance: This insurance protects the contents of a unit, such as stoves, fridges and/or washers or dryers. To be more specific, it will cover costs associated with accidental damage caused by fire, lightning, or flooding.
- Property Insurance: Property insurance as part of your landlord insurance policy will be similar to your home insurance. It will cover your building against natural disasters, such as fires and weather-related damage. It will also cover your building in the event of theft or vandalism.
- Loss of Rental Income: If the unexpected occurred and your property was destroyed, you’d be unable to collect rent. This can be major, especially if collecting rent is your main source of income. Loss of Rental Income coverage will assist you until your tenants can resume renting again.
What Does Landlord Insurance Not Cover?
Landlord insurance protects your rental property, but it does not cover every type of risk. Some examples of what landlord insurance does not cover include:
- Normal wear and tear: Your landlord insurance will not cover the gradual deterioration of your property, such as aging roofs and routine maintenance
- Tenant belongings: Landlord insurance does not cover anything the tenant owns. This includes furniture, books, electronics or clothing. This is where tenant insurance would come into play.
- Tenant Negligence: Many landlord insurance policies do not cover deliberate damage caused by tenants. This is why landlords require deposits or legal action when it comes to recovering costs.
- Vacancy periods too long: Your landlord insurance may cover vacancies, but coverage can decrease if your property stays empty for too long.
- Loss of rental income (in some situations): Landlord insurance will cover you if a loss is due to a covered insured event, such as a fire or major property damage. Review your policy to confirm whether you need additional Airbnb insurance for your rental setup.
When Should You Get Landlord Insurance?
In general, you should have landlord insurance if you:
- Rent your property to long-term tenants with a lease
- Have tenants who stay for several months or years at a time
- Want coverage for risks such as fire, property damage, liability or loss of rental income
- Do not operate the property as simply a “short-term rental”
Landlord insurance protects long-term rental properties, but it does not replace Airbnb insurance if you regularly host short-term guests.
Feature | Airbnb Insurance | Landlord Insurance |
Rental Type | Short-term | Long-term |
Guest turnover | High | Low |
Liability coverage | Yes | Yes |
Building coverage | Usually with separate policy | Yes |
Loss of rental income | Limited | Usually Available |
Best for | Airbnb hosts | Landlords |
Airbnb Insurance Vs Landlord Insurance: Common Questions
Is Airbnb insurance the same as landlord insurance?
No. Choose Airbnb insurance if you rent your property on a short-term basis. Choose landlord insurance if you rent to long-term tenants under a lease.
Does Airbnb AirCover replace Airbnb insurance?
No. AirCover will offer you some protection; it will not replace a larger Airbnb or short-term rental insurance policy.
Can I use landlord insurance for my Airbnb?
No. Many landlord insurance policies will exclude short-term rentals or require additional endorsements.
Do I need to tell my insurer I put my property on Airbnb?
Yes. Tell your insurer if you list your property on Airbnb or use it as a short-term rental. If you don’t, your insurer may reduce or deny your claim because your policy may not cover that type of rental.
Choosing The Right Insurance For Your Rental Property
Choosing between coverage types for your rental property, whether that’s Airbnb insurance or a landlord insurance policy, all comes down to how you use your property. If you regularly host short-term guests, Airbnb insurance is likely going to be the type of coverage you need. If you rent your property to long-term tenants under a lease, choose landlord insurance to protect your investment.
Remember, before you list your property or have tenants sign a lease, it is important to speak with your insurer to make sure you have the right coverage in place. If you’re in the market for insurance, don’t hesitate to reach out to us at isure. Contact us or request a quote today!
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