Airbnb in the home: Experts urge caution after Calgary ordeal

TORONTO – Airbnb may seem like a fast route to a quick buck for Canadians who own properties in popular travel destinations, but renting out a home to strangers can be perilous.

A Calgary family learned that lesson the hard way last weekend, when their home was trashed amid a “drug-induced orgy” by hard-partying renters and deemed unlikely to be habitable for months due to biohazard concerns. Property damage was assessed at around $75,000.

While the U.S.-based company is covering the costs, insurance companies are urging those who are pondering going the Airbnb route this summer, especially in cities like Toronto where an influx of visitors is expected for the Pan Am Games, to slow down and get informed.

A reality check is particularly important since the vast majority of property insurance policies don’t bank on people handing over the keys to their homes to complete strangers, Steve Kee of the Insurance Bureau of Canada said in a telephone interview.

“You really need to check with your insurance representative to find out what you’re covered for and what some of the risks may be,” he said. “Each company may have slightly different ways that they would apply this.”

The occupants of a home, Kee added, have to level with their insurance companies about their plans.

There are usually specific coverage options for properties that are known to be available for rent, he said. The policies typically protecting a person’s primary residence, however, are based on a vastly different set of assumptions.

“If you have a home policy, you are covered for the fact that you are living there, and from time to time friends and family may come and stay with you,” Kee said, adding that coverage rules can cease to apply the moment the homeowner vacates the premises and leaves it in the hands of others.

At least one Canadian province has begun mulling the idea of regulating an industry that has up until now been something of a Wild West. The lack of regulations governing the evolving shared rental economy has landed on Quebec’s political radar.

Earlier this week, Tourism Minister Dominique Vien said the province wants to make people pay taxes if they rent out their homes or rooms for profit, and subject them to the same regulations as registered hoteliers.

Some industry-watchers believe the time is right to start drafting guidelines for a business model that, despite the odd bout of bad press, shows no signs of flagging.

Gabor Forgacs, associate professor with Ryerson University’s School of Hospitality and Tourism, said companies like Airbnb are founded on a universally appealing principle — the desire to either make or save money.

People renting their property stand to turn a tidy profit, while consumers taking advantage of their offers often wind up paying far less than they would through a more traditional arrangement.

“I don’t expect any major changes in the business model,” Forgacs said. “As long as the economic reasons are there, these business models are sensible to a growing number of people.”

Airbnb itself said it welcomed a chance to put guidelines in place for renters and consumers alike.

“These rules should be straightforward and clear for regular people to follow, and recognize that the vast majority of Airbnb hosts only rent the homes they live in to visitors on an occasional basis,” the company said in a statement.

The insurance bureau, meantime, has not tracked the number of complaints filed as a result of arrangements made through Airbnb or similar services.

While Kee was unaware of any existing policies designed to cover such agreements, he added change may be in the offing given the growing popularity of Airbnb.

“The industry is looking at these things with great interest, and with a competitive marketplace, I guess anything’s possible in the future.”