I’m renting out a room this summer, how does it affect my insurance?
Summer brings a few big attractions to Alberta: the Jazz Festival, the Calgary Stampede, Westerner Days and more. Folks travelling in for these events can find accommodations costly and hard to find. In previous years, we’ve seen a surge in people opening up extra rooms in their homes for short-term renters, or even renting out their entire apartment or house for the duration of major events. For the host, this puts a little extra money in their pocket; for travelers, it provides a place to rest their heads after a busy day of exploring our cities. However, there are some things you’ll want to consider before temporarily renting out rooms this summer.
Some property insurance companies will permit a one-off rental during a big event (e.g.: Olympics in Vancouver.) However, you won’t know if this applies to you until you call your broker to discuss. When you speak to your broker about your intentions, they can check if your insurance company has formally approved rentals of this nature; if not, your broker can request approval for your own specific plans, allowing the insurance company to amend your policy and charge a premium for the increased risk of tenant occupancy.
If your insurance company hasn’t broadly granted this sort of permission, your policy probably excludes loss or damage caused by tenants and/or occurring while they’re occupying the premises – leaving you unexpectedly at risk of financial consequences if claims for damage by your tenants are denied.
Secondly, providing your home freely to others on a short-term rental basis (including services like Airbnb) can be grounds for insurers to void your policy, unless you disclosed that exposure in your application and were approved by the insurance company. Very few insurance companies will allow rentals of this nature, so anyone doing this without checking first is facing pretty serious coverage implications.
Our best advice? Call your broker before you offer rentals of any nature. Renting out may make you some money, but excluded claims due to undeclared rental use could end up costing you significantly more.