July 8, 2015 by Canadian Underwriter
Sharing services used for temporary rentals of property are all the rage these days, but insurance was not top of mind for a quarter of polled Canadian homeowners who used the services to rent out their properties, Allstate Insurance Company of Canada reports.
Research conducted by Leger on behalf of Allstate Canada shows that 25% of polled Canadians who have rented out their property through a property-sharing service say they did not think about insurance first, the insurer reported Wednesday. The quantitative online survey involved 1,538 Canadians, with fieldwork completed in early June, using LegerWeb, the pollster’s online panel.
In addition, the study found that 35% of those polled believe their existing home or tenant’s insurance provided coverage during a short-term rental period.
Ryan Michel, senior vice president and chief risk officer at Allstate Insurance Company of Canada, cautions, however, that they might not have been adequately covered. “If you want to be sure, have a discussion with your advisor about your plans and about what your current policy includes,” Michel advises in the statement.
Allstate Canada reports that more than 1.2 million around the world have turned to services such as Airbnb or HomeAway to offer temporary rentals.
But offering properties through shared accommodation services as a short-term rental “could lead to negative outcomes for homeowners if they haven’t taken steps to properly protect their property,” the insurer notes.
That being the case, Allstate Canada is urging Canadians to assess risk versus reward when considering listing their homes on short-term rental sites. The insurer issued the caution as summer kicks into high gear, in time for a number of high-profile events across Canada.
“While we certainly don’t want to inhibit people’s summer plans, we do want to help consumers consider potential risks, ask the right questions, and protect themselves against the unexpected,” says Michel.
Allstate Canada recommends that those considering renting out their properties ask themselves some questions, including those relating to whether or not they know how the property rental sites screen potential renters, who might be renting the property, does the service require guests to verify their identification, if the current insurance policy offers any coverage in case something goes wrong, and does the service have a host guarantee or host protection insurance?
“Though homeowners or landlords may assume that their insurance covers short-term rental agreements, this is most likely not the case,” Allstate Canada points out. “An insurance expert, like an agent, can provide insight into what would-be renters are covered for and more importantly, what they aren’t.”
Of all Canadians polled – including those who had not used a property-sharing service – 76% agreed that if they were to rent their home in the future, they would purchase more insurance, Allstate Canada notes. As well, 50% indicated the recent damage sustained by a Calgary rental host made them think differently about ever renting out their home or property.
In advance of the Pan Am Games, Ralph Palumbo, vice president, Ontario for Insurance Bureau of Canada, noted in a statement last month that “when renting your property, it’s important to check your policy with your home insurance representative.”
In addition, if personal vehicles are used to transport customers for payment, check with an insurance representative to ensure proper coverage is in place.