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The Commonwell Mutual Insurance Group launches new policy to protect clients against “home sharing rentals gone wrong”


July 10, 2017   by Canadian Underwriter


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Lindsay, Ont.-based The Commonwell Mutual Insurance Group, a home and auto insurance company, announced on Monday the launch of a new policy designed to protect clients against “home sharing rentals gone wrong” on popular sites like Airbnb, FlipKey and HomeAway.

Known as Host Shield Insurance, the policy protects many of the areas where occasional home renters could be compromised, including theft, vandalism and innkeepers’ liability up to $10,000 per claim, The Commonwell explained in a press released. “The product fills potential gaps hosts may not be aware of, from insurance policies provided by the various home sharing sites,” the release said.

A spokesperson for The Commonwell explained that some home sharing sites provide some form of coverage while the risk is being rented while others do not (home sharing risk is considered a commercial activity and is excluded from the base personal lines policy). If a homeowner uses a site that does not provide insurance coverage, there is a significant gap, the spokesperson said. For example, some sites, like Airbnb, provide coverage for third party and first party loss, but do not provide details of what is excluded – “no policy wording or declaration is provided, leaving significant unknowns until time of loss.”

As part of the launch, The Commonwell recruited former Toronto detective James Downs for inside tips to identify “reckless renters.” In his 22-year career, Downs specialized in organized crime, drug and biker cases and is currently a co-founder and security consultant at MKD International Inc. in Vaughan, Ont.

The tips include:

  • Get as much information about guests as possible. Create an online application form or a PDF that can be emailed to a potential renter. Ask for a copy of a driver’s licence or provincial ID card, credit card info, a cellphone number, social media handles and address. “You can also ask for, but might now get, the name and address of an employer,” Down said;
  • Verify information by checking out potential guests’ social media, such as LinkedIn, Facebook and Instagram to see if city and contact information lines up. “If you see any major red flags, trust your intuition,” Downs suggested. “Just try running their name in Google and see if anything comes up, if they are a serial Airbnb abuser, maybe they’ve been flagged by another home owner on a chat board, etc.”
  • When getting a credit card number from the guest, explain that there will be immediate charges for both total fees for their stay and an appropriate (and refundable) damage deposit (perhaps $300-$500 for a home rental). If the person objects or doesn’t have enough credit to process the payment, “decline the rental. It’s a red flag and you need to protect your home and property.” Asking for a credit card to be charged and for a damage deposit “is a completely reasonable demand,” Downs said;
  • Though most (or all) interactions with guests will be via email, listen to institution. “If they are reluctant to give you key information or have elaborate stories to explain delays – it’s a definite red flag,” Downs said; and
  • If renting out property, it’s likely the area is one where other homeowners are doing the same. Try and enlist a fellow renter or family member to drive by the property and “make sure everything looks right.”

“The Commonwell created the new policy based on customer demand from the Ontario markets that they serve, many of whom have ideal vacation rental properties that they choose to list on home sharing sites,” the release said.

Tim Shauf, president and CEO of The Commonwell, added that “home sharing sites like Airbnb are realities of the new economy and many of our clients in small and rural communities are leveraging them for additional income. We needed to step up and offer them an affordable way to protect their properties against potential damages.”

Established Jan. 1, 2014, The Commonwell is a merger of three longstanding mutual insurance companies “that has been built on more than a century of hands-on commitment to the local communities it serves.” Since its founding three years ago, the release said, The Commonwell operates on the same historical premise of its three legacy companies – “maintaining a focus on local presence and service that builds strong long-term relationships for the benefit of the greater community.”