More Canadians interested in home-swapping. Are they telling their insurers?

Canadians interested in keeping their travel expenses under control are exploring several options beyond just short-term rentals offered through online services like Airbnb — a recent study points to growing interest in online home-swapping platforms.

Nearly half of Canadians say accommodation eats up over 30% of their vacation budgets, according to a recent national study commissioned by home-swapping website HomeExchange, which made its study results public this week.

“In response, more travellers are looking beyond hotels and vacation rentals to find affordable, values-based alternatives,” HomeExchange says. “Twenty-eight percent of Canadians say they would consider using a home-swapping platform with no nightly fees…to make travel more accessible without sacrificing comfort or experience.”

But for Canadian home insurers, there isn’t much difference between home-swapping and short-term rentals offered online. The risk on your homeowner’s policy changes whenever you invite strangers to stay at your vacated property.

“The bottom line here is, what you’re essentially doing is you’re changing the risk [to] your home, because it’s no longer owner-occupied,” Rob de Pruis, national director of consumer and industry relations at Insurance Bureau of Canada, tells Canadian Underwriter. “You’re essentially letting strangers stay in your place with you not being there for a period of time….

“Depending on these sites, there isn’t a specific time limit. It could be one day, or it could be several months that people are staying at this place, or longer. So, if you have someone else living in your property for several months, you have no idea what they’re going to do.”

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And so, Canadians looking into these options should be notifying their insurance providers about their intentions to use online home-sharing platforms, says de Pruis. “If they don’t, and something happens, they could be faced with a policy cancelation or a claim denial.”

What’s more, industry professionals can make people aware their insurance options go beyond relying on the policies of home-sharing providers. Home-sharing providers’ policies may not provide the most suitable coverage for the homeowners, compared to what they might get from their own home insurers.

“Some of these sites do offer some type of insurance, but the details of those insurance policies aren’t really known until you sign up and go through the process,” De Pruis tells CU. “Even then, I would suspect no one insurance policy fits all countries and areas.

“I suspect some of these policies likely don’t even meet the minimum requirements for Canadian standards. In most provinces, there are statutory conditions that form a part of every insurance policy. But some of these [home-sharing sites] might be U.S. or European-based organizations, where they might not have those statutory conditions applied.

“So, we don’t really know in reality how that insurance policy would come into play — or if it would.”

The answer, he says, is for homeowners to take control of their own insurance coverage by talking to their insurance service providers.

“The bottom line is, you should always take control of the insurance for your property and your stuff,” he says. “You choose the provider, you choose the policy, and understand the options that are available, disclosing all the facts to make sure that you have a policy that meets your needs and will respond to the potential claims that could arise.”

De Pruis notes online home-sharing and car-sharing sites and apps have been around for some time. He says insurers’ products have evolved to meet the needs of Canadians as their habits have changed over time.

“I think we’re getting better and better all the time,” he says of the P&C insurance industry’s ability to adapt to Canadians’ changing lifestyle patterns. “There are more insurance options available today in Canada than there ever have been.

“We’re seeing some pretty specialized and unique coverages showing up, things like personal cyber coverage for people that do online shopping. That type of a product wasn’t really available even a handful of years ago.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.