With the Pan Am games around the corner many people are considering making a little extra cash by renting out their home. But wait, have you seen the video or heard about the Calgary couple who rented out their home for the weekend only to come back on the Monday to find it trashed? If not here is the link https://www.youtube.com/watch?feature=player_embedded&v=lljR3H1q1iE .
Property “sharing” and short term rentals have been gaining in popularity but renting out your home to strangers comes with risks. Sadly this is what the Calgary couple found out. Regardless of the rental situation being considered, one or two rooms, sharing of space, renting the entire house, there are very important items to consider.
Most home insurance policies are designed with the single family owner-occupied home in mind. If you rent out your home, part of your home, or are sharing the space for a period of time, even just a couple of days, your insurance company needs to know. If you don’t tell them and you return home like the Calgary couple did, you may find that you have no coverage. This is typically referred to a “material change in risk”. A situation where the insurance company may have refused the risk if they had known about it or would have charged an additional premium for the increased hazard. It’s always best to speak to your insurance advisor in advance. If your current company cannot provide the coverage needed, your insurance advisor may be able to find another one. If not, then you may not be using an insurance broker. They typically have many markets that they can approach on your behalf to obtain the right coverage for your situation. Oh, and if you are thinking on relying on the insurance provided by a web referral site such as airbnb, good luck. Make sure you read the fine print and search out where the insurance is being underwritten from. Canadian Insurance companies are regulated where other jurisdictions may not be.