Airbnb & Short-Term Rentals: What Ontario Landlords Need for Proper Coverage

Short-term rental insurance protects Airbnb and vacation rental properties from guest-related damage, liability claims, natural disasters, and lost income. Unfortunately, standard home insurance and platform protections often exclude short-term rental activity.

Becoming a successful Airbnb host lies in treating your property like a proper business, not a side hustle. That means pricing strategically, maintaining the unit routinely, and protecting your assets with insurance. Short-term rentals involve constant guest turnover. With new guests coming in every week, you’re exposed to far more third-party property damage and liability claims.

Unfortunately, standard home insurance protection, guest security deposit, or even Airbnb’s host protection insurance system might fall short during severe crises. You need to protect yourself against various industry risks to ensure your rental operation remains stable and secure for the long term. Here’s everything you should know about insurance for short-term rentals.

What is Short-Term Rental Insurance? 

Short-term rental insurance is a specialized property insurance policy made for properties rented on a temporary basis. It accounts for high guest turnover, frequent third-party occupancy, furnished interiors, and income dependency that standard residential policies typically exclude. Most policyowners have active listings on Airbnb, Vrbo, or similar services.

If you already have Airbnb’s host guarantee protection and a personal home insurance policy, would you still need the extra coverage? Yes, if you have a short-term rental business.

Standard homeowners insurance typically excludes business or short-term rental activity. Your claims would get denied once your insurance company finds out you’re hosting guests. Meanwhile, Airbnb Host Guarantee isn’t a comprehensive policy. It offers limited, platform-controlled reimbursements with strict exclusions, caps, and discretionary approval.

Comprehensive short-term rental insurance Airbnb unit owners can count on provides specialized coverage, protecting you in unpredictable circumstances.

Source: Pexels

What Does Short-Term Rental Insurance Cover? 

Although the specific limits might vary based on your insurance provider, here’s what a standard short-term rental insurance policy covers:

Property Damage 

Coverage applies to physical damage caused by an insured peril, such as fire, water leaks, or storms. Most policies also cover accidental damage. For example, if your guest breaks the sink, you can file a claim to help cover the repair costs.

Liability Claims 

Frequent guest turnovers mean a higher risk of injury claims that are harder to control. Should third parties get injured on your property, you’re protected. A standard Airbnb landlord insurance policy typically covers medical and legal expenses, including settlements, attorney fees, and court-awarded damages.

Loss of Rental Income 

If an insured peril causes your business property to become temporarily uninhabitable, your short-term rental insurance coverage can cover a portion of your lost rental income. Use it for operating expenses while you’re getting the repairs done.

Contents and Furnishings 

Standard landlord and home insurance policies don’t typically cover the furniture, appliances, electronics, and décor provided for guest use. For this reason, most Airbnb property owners purchase additional insurance.

How Much Does Short-Term Rental Insurance Cost in Ontario?

Insurance for short-term rentals can cost around $1,000 to $2,000 per annum if you have a detached single-family house. Condo units typically cost around $600 to $1,200 per year. Home sharing insurance appears to be cheaper at first glance, but it only applies to owner-occupied houses where one or two rooms are rented out.

Short-term rental insurance premiums vary wildly based on the following factors:

• Property Location: Urban centres, tourist hotspots, and high-demand rental markets typically carry higher premiums due to increased liability exposure.
• Number of Rental Listings: Hosts managing multiple properties or units face greater aggregate risk.
• Security System: Smoke detectors, fire suppression systems, security cameras, and monitored alarms can help reduce risk and may lower premiums.

Learn more: Optimize Landlord Insurance in Ontario: Costs & Coverage

Source: Pexels

FAQs About Short-Term Rental Insurance Coverage

In Summary 

Short-term rentals carry a higher risk than traditional rentals due to their frequent guest turnover.

• Standard homeowners insurance usually excludes short-term rental and business activity.
• Airbnb’s Host Guarantee and Host Protection provide limited, platform-controlled protection.
• Short-term rental insurance is designed to cover guest-related property damage, liability claims, and loss of rental income.
• Coverage often extends to furnished contents such as appliances, furniture, and electronics used by guests.
• Insurance costs in Ontario vary based on location, booking frequency, property type, number of listings, and safety features.
• Proper coverage limits should reflect full replacement cost and higher liability exposure from frequent bookings.

Get Specialized Insurance for Short-Term Rental Property Owners 

Unlike landlord or homeowner's insurance, the risks for short-term rentals vary widely due to guest turnover, frequency, and platform guidelines. It’s easy to under- or over-insure your asset.

To get the right short-term rental insurance coverage, work with the experts at KASE Insurance. We’re an award-winning commercial insurance brokerage offering a range of options for commercial and investment property owners. 

Talk to our specialists today! We’ll analyze how we can strengthen your existing home insurance policy.