Property owners who use home-sharing sites like Airbnb and VRBO to rent rooms, homes, and condominiums to earn extra cash during the holiday season may be tapping into the most lucrative time to be hosts.
December is typically considered the peak season for Airbnb and VRBO rentals. While no specific data is available for Canadian hosts renting in December into January, the typical Canadian Airbnb host earned about $12,200 in 2023. Winter tourism, particularly around ski resorts and scenic destinations, and holiday celebrations play a significant role in driving demand. Meanwhile, Statistics Canada notes the proportion of revenue of private short-term rentals has more than doubled from 7% in 2017 to 15% in 2021.
However, Airbnb and VRBO hosts should also consider the risks associated with holiday rentals, as booking holiday stays may involve elevated risks of property damage or liabilities.
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What Risks Do Airbnb and VRBO Hosts Face During the Holidays?
The increase in demand for short-term rentals for winter getaway celebrations poses challenges that hosts should keep in mind, including:
- Damage to Their Properties
Holiday parties and the consumption of alcohol or cannabis at guests’ celebrations on your property can lead to accidental damages to a host’s rental property.
- Injuries to Guests
Winter means icy, slippery conditions. A guest staying at a rental could slip and fall and suffer severe injuries that a host may be liable for.
- Theft
A higher volume of a host’s rental guests and their invited friends to the property can increase the possibility of items being stolen from the host’s property.
Airbnb and VRBO hosts need to be aware that a regular homeowner insurance policy may not cover rental activities. Furthermore, although Airbnb and VRBO offer liability coverage of up to $1 million each, there are strict limitations on what claims they’ll cover. For example, damage to your property caused by a guest may not be covered, and if you file a claim, you could be waiting for months for it to be investigated and resolved.
That’s why it’s advisable to buy customized Airbnb Host Insurance or VRBO Host Insurance to protect your property and finances.
7 Reasons Why Short-Term Rental Hosts Should Buy Business Insurance
Here are seven reasons why Airbnb hosts and VRBO hosts should purchase a customized business insurance policy beyond what those companies offer:
1. More Complete Coverage
The type and amount of coverage offered to hosts by Airbnb and VRBO can leave much to be desired, given the number of exclusions. Buying a policy to protect your short-term rental business from a Canadian business insurance brokerage ensures complete coverage without any gaps and better coverage limit options beyond what Airbnb and VRBO provide.
2. Coverage for Property Damage
Not all damage to your short-term rental property may be caused by guests – and those that are may not be covered. For example, damage to your property from severe weather, natural disasters, or vandalism isn’t covered by VRBO or Airbnb. A customized policy that includes commercial property insurance provides coverage for damages due to fire, water, natural disasters, theft, and vandalism.
3. Broader Coverage for Injuries to Guests
While Airbnb and VRBO may cover some claims related to injuries to guests, there are no guarantees, and again, the amount of coverage is limited. A serious injury to a guest can surpass each home-sharing company’s $1 million coverage limit. With a customized policy that includes general liability insurance, you have the option to increase your coverage.
4. Protection for Income Losses Due to Cancellations
If damage to your property caused by a fire or a previous guest forces you to cancel bookings, you’ll lose income. A customized business insurance policy that includes business interruption insurance can provide coverage for lost income following an insurable loss.
5. Coverage Year-Round
Neither Airbnb’s nor VRBO’s insurance offerings protect your rental property when it’s vacant. Business insurance for short-term rentals does. It protects your property year-round and during periods when it’s vacant.
6. Protection From Theft
The home-sharing sites’ insurance programs may also be insufficient for covering your losses due to theft by guests, their visitors, or contractors you hire to clean or repair the property. An Airbnb Host Insurance or VRBO Host Insurance policy from Zensurance fills that gap.
7. Cyber Insurance Protection
Your Airbnb or VRBO rental gets guests through each company’s online booking platform. Your guests’ confidential and financial data is shared with you, which puts you at risk if you experience a data breach or cyberattack that compromises your guests’ security. Neither Airbnb nor VRBO’s host insurance programs provide cyber liability insurance to cover your costs following a cyber incident.
How to Get Airbnb Insurance or VRBO Insurance Quickly
Zensurance can help you protect your Airbnb or VRBO property rental with customized, affordable Airbnb Host Insurance or VRBO Host Insurance.
Fill out our online application for a free quote in less than five minutes.
Get the actual coverage and protection your short-term rental property business needs and deserves before disaster strikes. Our knowledgeable team of brokers can advise you on what you need and get the right coverage from one of more than 50 insurers in our partner network.
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