Does Home Insurance Cover Airbnb & Short-Term Rentals in Nova Scotia?
As platforms like Airbnb and Vrbo grow in popularity, many Nova Scotians are using short-term rentals to earn extra income. But before you list your space and welcome guests, it’s crucial to understand how your home insurance fits in or where it might fall short.
What is a Short-Term Rental?
A short-term rental typically refers to renting out all or part of your home for less than 30 consecutive days. This includes hosting guests in a basement suite, cottage, or even a room in your primary residence. Whether it’s for a weekend or a couple of weeks, this kind of activity is considered commercial use—and that matters when it comes to insurance.
Does Standard Home Insurance Cover Your Airbnb Rental?
In most cases, no. Standard homeowner’s insurance in Nova Scotia is designed to protect your property and liability for personal (not commercial) use. When you start renting out space to paying guests, you introduce new risks such as property damage, theft, or injury that your standard policy probably won’t cover.
Many policies specifically exclude coverage for business activities. That means if a guest accidentally floods your bathroom or injures themselves on your property, you could be left paying out of pocket unless you’ve made the proper adjustments to your insurance. Learn more about these details in our blog: Essentials for Renting Out Part of Your Home.
Options for Short-Term Rental Insurance Coverage: What You Need to Know
If you’re considering listing your home or cottage on Airbnb or another platform, you have a few options to ensure you’re adequately protected.
1. Check with Your Insurer
The first step is to contact your insurance provider. Let them know how often you plan to rent out the space and whether it’s your full-time residence or a secondary property. They can advise you on whether your current policy can be modified or if a different type of policy is needed.
2. Add a Short-Term Rental Endorsement
Some insurers offer an endorsement (or rider) that can be added to your home insurance policy. This typically provides additional protection for short-term rental activities, such as coverage for damage caused by guests and liability.
3. Commercial or Rental Property Insurance
If you frequently rent out the space or use it mainly as a source of income, you might need a commercial insurance policy or rental property insurance. These policies are specifically designed for income-generating properties and offer broader protection for liability, loss of income, and building coverage.
What Does Airbnb’s Host Guarantee Coverage?
While Airbnb does offer a Host Guarantee and Host Protection Insurance, these programs have significant limitations. For instance, they may not cover all types of damage or liability claims, and they aren’t a substitute for a personal insurance policy tailored to your needs.
Relying solely on Airbnb’s protection can be risky. Their coverage may not cover every situation, and resolving disputes can take time. That’s why it’s crucial to have your own insurance as a primary safety net.
Tips Before Listing Your Short-Term Rental Property
If you’re considering short-term rentals in Nova Scotia, here are a few quick tips:
- Notify your insurance broker before listing the space.
- Install safety measures, like smoke detectors, locks, and security systems.
- Keep an inventory of furnishings and valuables.
- Screen guests carefully and set clear house rules.
- Stay compliant with local regulations and licensing requirements.
Renting out your home or cottage on Airbnb can be a great way to earn income, but it also comes with new risks. The good news? With the right insurance coverage, you can host with confidence. Contact a broker or one of our top-rated, experienced insurance advisors at Bauld Insurance to explore your options and ensure your property and peace of mind are fully protected.
