Though short-term rentals are common in the real estate market, insurance coverage for landlords isn’t exactly standard – making the broker’s role especially important.
One firm offering landlord insurance is Ches Special Risk, whose president and CEO, Gary Hirst, explained that landlord insurance is “easily available in the MGA market” in Canada but “not necessarily available in the standard market.”
“There are various interesting extensions that can be bought along with it [landlord insurance],” he said. “An example of that is legal expense insurance. You may have someone who’s trying to sue for something the tenants have done. So it’s possible to extend our policies to cover the legal fees associated with that.
“We also offer extensions for things like sitting tenants – so if you have anyone sitting there who hasn’t paid their rent for a couple of months, we will pay the expenses incurred in evicting that student
and then we will pay for the back-dated rent.”
In the age of the sharing economy, however, Hirst explains that landlords are often much more than the traditional term may indicate.
“We cover Airbnb,” he said. “Of course the concern is if there is damage to the property or theft of personal items, who is going to pay for that – because the condo boards have made it
clear they’re not going to pay.
“To be on the safe side, landlords go into the
MGA market, looking for coverage for their short-term rentals.”
Hirst explained that landlord insurance hasn’t brought in the major insurers yet due to its unique risks and, in the case of Airbnb, relatively recent popularity.
“Standard market is called standard market because they only like standard risk,” he said. “A risk like Airbnb is presently considered non- standard. How long that will last for, no-one particularly knows. We do know that, for the moment, standard insurers don’t have any appetite to pick up short rentals.”