How to Insure Your Property for Short-Term Guests

Essential Guide to Protecting Your Investment and Staying Covered

Why Standard Home Insurance Isn't Enough

CRITICAL: Most standard homeowner or landlord insurance policies DO NOT cover short-term rentals like Airbnb or VRBO. Using your property for short-term rentals without proper coverage could:

• Void your existing policy

• Leave you personally liable for damages

• Result in denied claims

• Expose you to lawsuits

The good news: There are specific insurance products designed for short-term rental hosts that provide comprehensive protection.

 

Types of Insurance You Need

1. Short-Term Rental Property Insurance

What it covers:

• Physical damage to the building

• Damage to contents and furnishings

• Loss of rental income

• Guest liability claims

• Property damage caused by guests

Who offers it in Canada:

• Intact Insurance

• The Co-operators

• Aviva

• Wawanesa

• TD Insurance

• Specialty providers (Proper Insurance, Fairbnb, etc.)

Cost: Typically $1,500 - $3,500 per year (BC average)

2. Commercial General Liability Insurance

What it covers:

• Bodily injury to guests

• Property damage claims

• Legal defense costs

• Medical payments

Coverage amount: Minimum $2 million recommended

Cost: $500 - $1,200 per year

3. Contents Insurance for Furnishings

What it covers:

• Furniture, beds, sofas

• Electronics (TVs, appliances)

• Kitchen equipment

• Linens, towels, decor

• Theft or damage by guests

Coverage amount: Calculate total replacement value

Cost: Usually included in property insurance or $300-800 per year separately

4. Loss of Income Insurance

What it covers:

• Lost rental income if property becomes uninhabitable

• Coverage during repairs after covered events

• Typically 6-12 months of income protection

Cost: Usually bundled with property insurance

What Your Insurance Should Cover

Property Damage

Building structure:

• Fire and smoke damage

• Water damage (burst pipes, flooding)

• Wind and hail damage

• Vandalism

• Theft

Personal property:

• All furnishings and equipment

• Guest belongings (limited coverage)

• Appliances and fixtures

Liability Protection

Guest injuries:

• Slip and fall accidents

• Burns or cuts

• Any bodily injury on property

• Medical expenses

• Legal fees if sued

Property damage to others:

• Guest's personal belongings damaged

• Neighboring property damage

• Accidental damage caused by you or your guests

Additional Coverages to Consider

Earthquake insurance (BC specific)

• Not included in standard policies

• Essential in BC's seismic zones

• Costs 10-20% of annual premium

Sewer backup

• Covers damage from backed-up drains

• Common urban issue

• Usually $150-300 per year

Equipment breakdown

• Covers HVAC, appliances, water heaters

• Mechanical failure protection

• Usually $100-200 per year

Cyber liability (if accepting online payments)

• Data breach protection

• Identity theft coverage

• Growing concern for hosts

Understanding Policy Exclusions

Common Exclusions (NOT Covered):

Wear and tear

• Normal deterioration

• Aging appliances

• Gradual damage

Intentional damage

• Damage you cause deliberately

• Illegal activities

War and terrorism

• Standard exclusion in most policies

Nuclear hazards

• Radiation damage

Certain natural disasters

• Earthquakes (requires separate policy)

• Floods (may require separate coverage)

Bed bugs and pests

• Usually excluded

• May require specialized coverage

Business activities beyond hosting

• Using property as office

• Manufacturing or storage

Read the Fine Print:

Always review:

• Exclusions section

• Coverage limits

• Deductibles

• Claim procedures

• Cancellation terms

Platform-Provided Protection (Airbnb, VRBO)

Airbnb Host Guarantee

Coverage: Up to $3 million CAD for property damage

What's covered:

• Physical damage to property

• Damage to belongings

What's NOT covered:

• Cash and securities

• Collectibles and artwork

• Jewelry and pets

• Shared/common spaces

• Theft by guests

Important limitations:

• Must be reported within 14 days

• Requires extensive documentation

• Not a substitute for insurance

• Claims can be denied

• Deductible applies

Airbnb Host Protection Insurance

Coverage: Up to $1 million liability coverage

What's covered:

• Bodily injury to third parties

• Property damage to third parties

What's NOT covered:

• Intentional acts

• Certain dog breeds

• Motor vehicles

• Business activities

VRBO Host Guarantee

Coverage: Up to $1 million for property damage

Similar limitations to Airbnb

Why Platform Coverage Isn't Enough:

• Secondary coverage (only pays after your insurance)

• Limited scope (many exclusions)

• Claim difficulties (complex process, often denied)

• No building coverage (contents only)

• Doesn't satisfy mortgage requirements

Bottom line: Platform protection is a bonus, not a replacement for proper insurance.

How to Get the Right Coverage

Step 1: Notify Your Current Insurer

Before listing your property:

• Call your current insurance company

• Disclose short-term rental plans

• Ask about coverage options

• Get it in writing

Consequences of not disclosing:

• Policy cancellation

• Claims denial

• Potential fraud charges

Step 2: Compare Short-Term Rental Policies

Get quotes from multiple providers:

Traditional insurers:

• Intact Insurance

• The Co-operators

• Aviva Canada

• Wawanesa

• TD Insurance

Specialty STR insurers:

• Proper Insurance (properinsurance.ca)

• Fairbnb Insurance

• Zensurance

• Slice (on-demand insurance)

• CBIZ Insurance

What to compare:

• Coverage limits

• Deductibles

• Exclusions

• Premium costs

• Claims process reputation

Step 3: Calculate Coverage Needs

Building coverage:

• Replacement cost of structure

• Not market value - actual rebuild cost

• Include detached structures

Contents coverage:

• List all furniture and items

• Calculate replacement value

• Keep detailed inventory with photos

Liability coverage:

• Minimum $2 million recommended

• $3-5 million for higher-value properties

• Consider umbrella policy for extra protection

Loss of income:

• Calculate monthly rental income

• Multiply by 6-12 months

• Include average booking rates

Step 4: Provide Required Information

Insurers will ask about:

• Property type and age

• Number of guests accommodated

• Rental frequency (days per year)

• Safety features (smoke detectors, locks)

• Security measures

• Claims history

• Property value and contents value

Step 5: Review and Purchase

Before signing:

• Read entire policy document

• Understand all exclusions

• Confirm coverage amounts

• Verify effective dates

• Save all documentation

Cost Factors for STR Insurance

What Affects Your Premium:

Property characteristics:

• Location and building age

• Construction type (wood vs concrete)

• Square footage

• Number of bedrooms

• Safety features installed

Rental activity:

• Number of rental days per year

• Guest capacity

• Average stay length

• Hosting frequency

Coverage selections:

• Coverage limits chosen

• Deductible amount (higher = lower premium)

• Additional coverages added

• Liability limits

Your profile:

• Claims history

• Credit score

• Experience as host

• Property management involvement

Ways to Reduce Premiums:

Increase security:

• Install security system

• Add smart locks

• Install cameras (exterior only)

• Motion-sensor lighting

Safety improvements:

• Smoke and CO detectors on every level

• Fire extinguishers

• First aid kit

• Clear emergency exits

Risk management:

• Screen guests carefully

• Require security deposits

• Use rental agreements

• Set house rules

Higher deductibles:

• Increasing deductible saves premium

• Balance affordability with out-of-pocket risk

Bundle policies:

• Combine with auto insurance

• Multi-property discounts

Professional management:

• Using licensed property manager

• May qualify for discounts

Filing a Claim: What You Need to Know

Document Everything Immediately:

Take photos/videos:

• Damage from every angle

• Wide shots and close-ups

• Before and after if possible

• Time-stamped images

Gather evidence:

• Guest booking information

• Communication records

• Police reports (if applicable)

• Witness statements

• Receipts for emergency repairs

Create detailed inventory:

• List every damaged item

• Original purchase date and cost

• Current replacement value

• Repair estimates

Reporting Timeline:

Immediate (within 24-48 hours):

• Report to insurance company

• File police report if theft/vandalism

• Document damage

Within 7 days:

• Submit formal claim

• Provide all documentation

• Complete claim forms

Follow-up:

• Respond promptly to insurer requests

• Keep records of all communication

• Track claim status

Common Claim Mistakes to Avoid:

Delaying reporting

• Most policies require immediate reporting

• Delays can result in denial

Insufficient documentation

• Poor photos or missing receipts

• Can't prove extent of damage

Making repairs before adjuster visits

• May invalidate claim

• Get approval first for emergency repairs

Not reading policy carefully

• Filing claims for excluded items

• Wasting time and money

Exaggerating damages

• Insurance fraud

• Can result in claim denial and policy cancellation

Safety Requirements for Insurance

Mandatory Safety Features:

Fire safety:

• Smoke detectors on every floor

• Working fire extinguisher

• Carbon monoxide detector (if fuel-burning appliances)

• Clear emergency exit routes

• Posted emergency procedures

Security:

• Working locks on all doors and windows

• Adequate exterior lighting

• House number visible from street

• Secure storage for valuables

Structural:

• Handrails on stairs

• GFCI outlets in bathrooms/kitchen

• Non-slip surfaces in tubs/showers

• Adequate heating in winter

Best Practices Beyond Requirements:

Guest safety:

• First aid kit readily available

• Emergency contact list posted

• Flashlights with batteries

• Water and power shut-off instructions

Property protection:

• Water leak detectors

• Security cameras (exterior)

• Smart home monitoring

• Regular maintenance schedule

Documentation:

• Safety feature inspection log

• Maintenance records

• Guest acknowledgment of rules

• Pre-arrival safety information

Special Considerations for BC Properties

Earthquake Insurance

Why it matters in BC:

• High seismic activity region

• Not covered in standard policies

• Can cost 10-20% of total premium

What it covers:

• Building repair/replacement

• Contents damage

• Additional living expenses

Deductibles:

• Typically 10-20% of insured value

• Higher than standard claims

Should you get it?

• Strongly recommended for BC

• Required by some lenders

• Consider cost vs. risk

Flood Insurance

BC considerations:

• Increasing flood risks

• Atmospheric rivers

• Spring runoff

Coverage options:

• Overland flooding

• Sewer backup

• Ground water seepage

Strata/Condo Considerations

If your rental is in a strata:

Strata restrictions:

• Check bylaws on short-term rentals

• Some prohibit or limit STRs

• May need approval

Insurance requirements:

• Strata master policy covers building

• You need contents and liability

• "Loss assessment" coverage recommended

• Check for coverage gaps

Disclosure requirements:

• Notify strata council

• May affect strata insurance rates

Insurance Checklist for STR Hosts

Before Listing:

• [ ] Contact current insurer about STR plans

• [ ] Get written confirmation of coverage or cancellation

• [ ] Shop and compare STR-specific policies

• [ ] Calculate appropriate coverage amounts

• [ ] Install required safety equipment

• [ ] Take detailed photos/video of property

• [ ] Create contents inventory with values

• [ ] Purchase adequate coverage before first booking

• [ ] Save all policy documents

Ongoing:

• [ ] Review policy annually

• [ ] Update coverage for new purchases

• [ ] Maintain safety equipment

• [ ] Keep detailed booking records

• [ ] Document property condition before/after guests

• [ ] Pay premiums on time

• [ ] Report any incidents immediately

• [ ] Keep emergency contact for insurer

After Incidents:

• [ ] Document damage immediately

• [ ] Take photos/videos

• [ ] Notify insurer within 24-48 hours

• [ ] File police report if needed

• [ ] Don't make repairs without approval

• [ ] Keep all receipts

• [ ] Follow up on claim regularly

 

Common Questions About STR Insurance

"Can I just use my landlord insurance policy?"

No. Landlord insurance covers long-term rentals (typically 30+ days). Short-term rentals have different risk profiles and aren't covered.

"Is Airbnb's coverage enough?"

No. Airbnb Host Guarantee is secondary coverage with significant limitations. It's not insurance and doesn't satisfy mortgage requirements.

"What if I only rent occasionally?"

Even occasional rentals require proper coverage. Some insurers offer "on-demand" policies for part-time hosts.

"Will insurance cover damage from a party?"

Maybe, depending on policy. Many exclude damage from parties or large gatherings. Check your specific policy.

"Does insurance cover lost income from cancellations?"

Standard policies don't cover guest cancellations. Loss of income coverage applies when property becomes uninhabitable due to covered damage.

"What if a guest sues me?"

This is what liability coverage is for. Minimum $2 million recommended. Covers legal defense and settlements.

"Can I insure just the rental suite, not my whole house?"

Yes, if you live on-site and rent a separate unit. Discuss with insurer about splitting coverage.

"What happens if I don't tell my insurer?"

Your policy could be voided, claims denied, and you could face fraud charges. Always disclose.

 

Insurance Provider Resources

Major Canadian Insurers with STR Coverage:

Intact Insurance

• Website: intact.ca

• Offers dedicated STR policies

• Strong Canadian presence

The Co-operators

• Website: cooperators.ca

• Homeowners with rental endorsements

• Good for part-time hosts

Aviva Canada

• Website: aviva.ca

• Short-term rental coverage

• Bundle options

Wawanesa

• Website: wawanesa.com

• BC-based insurer

• Competitive rates

Specialty STR Insurers:

Proper Insurance

• Website: properinsurance.ca

• STR-specific coverage

• Quick online quotes

Slice

• On-demand insurance

• Pay only for booked days

• Good for occasional hosts

Zensurance

• Website: zensurance.com

• Small business focus

• Online application

Finding an Insurance Broker:

Insurance Brokers Association of BC (IBABC)

• Website: ibabc.org

• Find licensed brokers

• Compare multiple insurers

Working with WWRTO for Insurance Compliance

WWRTO Short-Term Rental Management ensures:

Insurance compliance:

• Guide you to appropriate coverage

• Verify adequate protection

• Document safety features

• Maintain required standards

Risk management:

• Thorough guest screening

• Detailed property inspections

• Incident documentation

• Claims support

Safety maintenance:

• Regular safety equipment checks

• Code compliance

• Guest safety protocols

• Emergency procedures

Peace of mind:

• Professional oversight

• Insurance claim assistance

• Legal compliance

• 24/7 support

Contact us for a consultation: Call: (604) 512-9786
Email: rtowinwin@gmail.com
Serving: British Columbia

Key Takeaways

Critical points to remember:

1. Standard home insurance doesn't cover short-term rentals - You need specialized coverage

2. Platform protection isn't enough - Airbnb/VRBO guarantees have major limitations

3. Disclosure is mandatory - Always tell your insurer about STR activity

4. Adequate coverage protects your investment - Don't underinsure to save premium

5. Safety features reduce premiums - Invest in smoke detectors, security, and maintenance

6. Document everything - Photos, inventory, and records are essential

7. Read your policy carefully - Know what's covered and excluded

8. File claims promptly - Delays can result in denials

9. Review coverage annually - Update as property value and contents change

10. Professional management helps - Reduces risk and may lower premiums

Final Thoughts

Proper insurance is not optional for short-term rental hosts - it's essential protection for your investment, your guests, and your financial future. While it adds to your operating costs, the alternative of being uninsured or underinsured could be financially devastating.

Take the time to understand your coverage needs, shop for the right policy, maintain safety standards, and document everything. The peace of mind that comes from knowing you're properly protected is invaluable.

Don't wait until after an incident to discover you're not covered. Get proper insurance before your first guest checks in.

This guide is for informational purposes only and does not constitute insurance or legal advice. Always consult with licensed insurance professionals about your specific situation. Insurance requirements, coverage options, and costs vary by location and provider.

Last updated: November 2025 - Verify current requirements and options with insurers