AirCover vs Short-Term Rental Insurance (Ontario Hosts Guide)

Last Updated on July 31, 2025 by Fullhome Airbnb Manager

AirCover vs Third-Party Insurance: What Really Pays When Guests Cause Big Losses

AirCover is great—but not enough. Airbnb’s free program caps property damage at US $3 million and liability at US $1 million, excludes most fires, water losses, and theft of valuables, and doesn’t name you as an insured party under Ontario law.

A dedicated short-term-rental (STR) policy from Proper, Slice, or an Ontario carrier can plug those gaps with higher liability limits, loss-of-income coverage, and recognition by condo boards and lenders.

Serious hosts combine both layers: AirCover for guest-caused mishaps, plus third-party insurance for catastrophic events and regulatory compliance.

AirCover (Airbnb’s Free Protection for Hosts)

Coverage Overview

• Host Damage Protection: Up to US $3 million per reservation for property damage caused by guests, including pet damage, extra cleaning, recovery of lost income, and damage to parked vehicles on-site

• Host Liability Insurance: Up to US $1 million per stay for third-party liability (bodily injury or guest property damage), including common areas Airbnb / Airbnb / Airbnb.

• Additional features: identity verification, reservation screening, 24‑hour safety line

Third‑Party Short‑Term Rental Insurance & Other Options

Why You Need It (Ontario Hosts)

• Regular homeowner policies often exclude business use—Airbnb hosting is considered a commercial activity hostfully.com insurancegenie.ca

• Short-term rental insurance tailored for Airbnb fills coverage gaps:

  • Loss of income due to uninhabitable property from guest-caused or other events

  • Liability limits above US $1 million

  • Intentional guest damage or vandalism

  • Theft of valuables by guests or third parties Complete Hospitality Management

• Providers like Proper Insurance, Safely, Slice, and Ontario-based insurers can issue policies covering building, contents, liability, income loss, and more—including umbrella liability policies for extra protection.

Coverage at a Glance—AirCover vs. STR Insurance

Key takeaway: AirCover handles day-to-day guest accidents; an STR policy shields you from big-ticket disasters and legal liabilities.

AirCover’s Biggest Gaps & How They Expose Ontario Hosts

1. Legal Status

   • AirCover is a “contractual guarantee,” not a regulated insurance product, so courts and lenders may not recognise it.

   • Ontario condo bylaws often require the owner to show a named-insured certificate—AirCover doesn’t issue one.

2. Liability Cap of US $1 M

   • Serious injuries or multi-unit fires can soar past US $1 M. Without an umbrella, hosts pay the difference.

3. Excluded Perils

   • Fire, mold, faulty equipment, or natural disasters are out. Standard STR policies treat these as covered risks.

4. Intentional & High-Value Thefts

   • AirCover can deny claims for deliberate vandalism or missing art/jewellery, especially if guests weren’t fully verified.

5. Income Loss Blind Spot

   • If your property is offline for weeks after a kitchen fire, AirCover pays zero unless the guest directly caused that fire and you filed within 14 days.

Ontario-Focused STR Insurance Options

Below are the most common third-party carriers—and what they add on top of AirCover—for hosts in Toronto, Niagara, Muskoka, and beyond.

Tip: Ask for “non-owner-occupied short-term rental endorsement.” Regular homeowner riders still exclude business use.

Recommendations for Ontario Hosts

1. Review AirCover terms carefully—report within 14 days, submit evidence, use Resolution Center, expect documentation requests 

2. Shop for STR insurance from credible providers to supplement AirCover.

3. Choose policies that:

   • Name you as the insured,

   • Extend liability beyond US $1 million,

   • Include income-loss and theft coverage.

4. Check for overlap: Ensure your insurance doesn’t duplicate AirCover but fills its gaps.

5. Document your property thoroughly, use house rules, guest screening, and maintain records—this strengthens claim validity.

Decision Tree — Do You Need More Than AirCover?

1. Entire-home rentals or luxury assets → pair AirCover with an STR policy.

2. Private-room, low-risk hosts → may rely on AirCover + inexpensive umbrella.

3. Condo or lender documentation required? → third-party policy is non-negotiable.

4. FAQs That Capture “People Also Ask”

Key Takeaways

• AirCover is valuable for standard, guest-caused damage and liability—but it’s not comprehensive.

• For significant risks or larger-scale hosting operations, third-party STR insurance is a must, especially in Ontario where legal naming and regulatory compliance matter.

• A combined approach—AirCover plus a robust third-party STR policy—offers the best protection for serious hosts.

AirCover = free baseline for guest mishaps;

STR policy = paid shield for fire, weather, theft, and > US $1 M lawsuits.

Ontario hosts often must be the named insured—only third-party carriers provide that certificate.

Combine AirCover + STR insurance + solid documentation for bullet-proof protection.

Next Step for Stress-Free Hosting

FullHome Airbnb Toronto audits your current coverage, recommends Ontario-approved STR policies, and manages every damage claim under AirCover so you never face a coverage gap.

➡️ Book your free 15-minute insurance gap check now and safeguard your Airbnb investment.

Related reading on FullHome.ca:

• Airbnb Damage Claim Denied? Step-by-Step Appeal Guide
• Top 7 Reasons Airbnb Rejects Host Damage Claims
• Airbnb Security Deposit Refund Pending? Guide for Guests & Hosts