TL;DR — Key Points to Know
- Your regular condo policy almost certainly excludes short-term rental activity. Hosting without telling your insurer can leave you uncovered — or void your policy at claim time.
- Airbnb’s AirCover is free but limited: the $3M USD damage protection is a reimbursement program (not insurance), and the $1M USD liability cover sits behind your own policy.
- Toronto does not require short-term rental insurance. Mississauga does: $2M liability with the city named as additional insured.
- A dedicated short-term rental policy for an Ontario condo typically runs $600–$1,200 a year.
Table of Contents
- Why your regular condo insurance doesn’t cover Airbnb
- What short-term rental insurance actually covers
- What Airbnb’s AirCover does — and doesn’t do
- What Toronto and Mississauga actually require
- How much it costs in Ontario in 2026
- Questions to ask your broker before you list
- Frequently Asked Questions
Why Your Regular Condo Insurance Doesn’t Cover Airbnb
Here’s the expensive surprise most condo hosts learn at claim time: a standard condo insurance policy is written for how you live in your home, not for how guests pay to stay in it. Regular condo insurance covers three things: your belongings, your unit upgrades, and your personal liability as a resident. It assumes you’re living there (or it’s sitting empty as a second home). Once strangers start paying for nightly stays, insurers treat it as a business activity — and business activity is excluded from standard policies.
The dangerous part: many hosts never tell their insurer. If a guest floods your bathroom or starts a kitchen fire and the adjuster finds a listing for your unit online, the claim can be denied. The policy can also be voided outright for material misrepresentation — you didn’t disclose a material change in how the unit is used.
Ontario’s Condominium Act adds another wrinkle. The Act requires your condo corporation to carry insurance, but it does not require unit owners to carry their own. In practice, almost every mortgage lender and many condo boards require it anyway. And the corporation’s policy only restores your unit to “standard unit” condition — basic flooring, fixtures, and finishes as originally built. Every upgrade you’ve made (the nicer kitchen, the hardwood, the light fixtures) is your problem unless your own policy covers it.
Bottom line: before a single guest arrives, tell your insurer what you’re doing. Get the answer in writing.
What Short-Term Rental Insurance Actually Covers
A dedicated short-term rental policy is built for hosting. It typically covers:
- Property damage by guests. Broken furniture, stained carpets, damaged appliances — the things that happen between turnovers.
- Liability. If a guest is hurt in your unit, or a guest damages a neighbour’s unit (hello, condo living), your policy defends you and pays claims.
- Loss of rental income. If an insured event makes the unit unlivable for weeks, the policy can replace part of the bookings you lose while repairs happen.
- Contents for guest use. The furnishings, electronics, and décor you provide for guests are usually excluded from standard policies. STR policies cover them.
What it usually doesn’t cover: normal wear and tear, mould, pre-existing damage, and cash or valuables left in the unit. Read the exclusions. Every policy has them.
For a Toronto condo host, the liability piece matters most. In a tower, one guest’s overflowing bathtub can become three neighbours’ water-damage claims. Your corporation will fix the common elements and charge the costs back where it can — potentially to you.
What Airbnb’s AirCover Does — and Doesn’t Do
Every Airbnb booking comes with AirCover for Hosts. It’s free and automatic. It has two parts:
- Host damage protection: up to $3M USD per stay for guest-caused damage to your home and belongings, plus specialized cleaning and some lost income from cancelled bookings.
- Host liability insurance: up to $1M USD per occurrence if a guest sues over injury or property damage. This part is actual insurance, underwritten by a licensed insurer. It sits behind your own policy as excess coverage.
That sounds complete. It isn’t. Know the gaps:
- AirCover is not insurance. The $3M damage portion is a voluntary reimbursement program. Airbnb sets the rules, runs the claims process, and makes the final call — there is no independent adjuster and no appeal. Only the liability portion is a real insurance policy.
- Airbnb bookings only. Direct bookings, VRBO stays, and off-platform guests are completely outside AirCover.
- No wear and tear. Scuffed floors, aging appliances, faded upholstery — that’s hosting overhead, not a claim.
- No acts of nature. Floods, storms, earthquakes: excluded.
- Vacant periods. If a pipe bursts while the unit sits empty between guests, AirCover doesn’t apply.
- Cash and valuables. Never leave them in the unit.
AirCover is a good backstop for catastrophic guest damage on Airbnb bookings. It is not a replacement for your own policy. Airbnb itself tells hosts to maintain their own insurance and confirm it covers short-term rental activity.
What Toronto and Mississauga Actually Require
The two cities take very different approaches.
Toronto does not require short-term rental insurance. When the city designed its licensing framework, staff recommended against mandating it — home insurance isn’t mandatory in general, and short-term rentals were judged lower-risk than activities the city does require insurance for. You still need to register with the city and collect the 6% Municipal Accommodation Tax. But no insurance certificate is part of the application. Not required doesn’t mean not needed. See the flooded-bathroom scenario above.
Mississauga requires $2M in commercial liability insurance. Under By-law 0289-2020, your licence application must include an insurance certificate showing commercial general liability coverage of at least $2,000,000 per occurrence — covering bodily injury, personal injury, death, and property damage — with the City of Mississauga named as additional insured. Your regular condo policy doesn’t count. AirCover doesn’t count. It must be a real commercial policy, renewed with each annual licence. If you’re hosting in Mississauga and relying on AirCover alone, you’re unlicensed. That’s a $500–$1,000 administrative penalty at the light end, and up to $100,000 per offence under the Provincial Offences Act at the heavy end.
How Much It Costs in Ontario in 2026
For a Toronto or GTA condo, a dedicated short-term rental policy typically runs $600–$1,200 a year. Detached houses run higher, roughly $1,000–$2,000 a year, because the insurer is covering the whole building envelope.
What moves your premium:
- Location. Downtown Toronto and tourist areas carry higher liability exposure than quieter neighbourhoods.
- How often you host. Occasional hosting (a few weeks a year) costs less than full-time nightly turnover.
- Liability limit. $2M costs more than $1M. In a condo tower, don’t cheap out on this.
- Safety features. Smoke and CO detectors, monitored alarms, and smart locks can reduce risk — and sometimes the premium.
Canadian insurers now sell products built specifically for short-term rentals — providers like Duuo and APOLLO are built around this — or a broker can add a short-term rental endorsement to a rental-property policy. Either way, the magic words are: the policy must explicitly name short-term rental or Airbnb activity. “Rented condo” alone usually means long-term tenants in the insurer’s eyes.
Compare that $600–$1,200 against the real math: our breakdown of Airbnb management fees in Toronto shows what a well-run condo earns. One uncovered guest-damage claim wipes out years of insurance premiums.
Questions to Ask Your Broker Before You List
Call your broker before you list — not after your first claim. Ask these, and get the answers in writing:
- Does my current condo policy cover short-term rental activity (guests staying under 28 days for payment)? If not, what does that cost as an endorsement?
- If I add short-term rental coverage, what’s my liability limit — and does it cover damage my guests cause to neighbouring units and common elements?
- Are my unit upgrades and guest furnishings covered, or only the standard unit finishes?
- Does the policy cover loss of rental income if the unit becomes unlivable?
- Am I covered for direct bookings and other platforms, or only Airbnb stays?
- Does my condo corporation require a specific liability minimum or to be named on my policy? (Ask your building too — many do.)
- If I host in Mississauga, will the certificate name the City as additional insured for the full policy term?
If your broker can’t answer the short-term rental questions clearly, find one who works with hosts. This is a specialized product now, and a generalist broker may not know what to look for.
Frequently Asked Questions
Does my regular condo insurance cover Airbnb stays?
No. Standard condo policies exclude commercial activity, and nightly hosting counts as commercial activity. Hosting without disclosing it can lead to a denied claim or a voided policy. Tell your insurer and get STR-specific coverage.
Is Airbnb’s AirCover enough insurance on its own?
No. The $3M damage protection is a reimbursement program, not insurance — Airbnb decides the outcome. The $1M liability portion is real insurance but sits behind your own policy, and everything only applies to stays booked on Airbnb. Carry your own short-term rental policy.
Does Toronto require insurance for short-term rentals?
No. The City of Toronto does not mandate insurance for short-term rental operators. Mississauga does — $2M commercial liability with the city named as additional insured.
How much does short-term rental insurance cost for a condo in Ontario?
Typically $600–$1,200 a year for a condo unit, depending on location, hosting frequency, liability limit, and safety features.
Can my condo board require me to carry insurance?
The Condominium Act doesn’t force unit owners to insure, but many buildings require it in their declaration, bylaws, or rules — and almost every mortgage lender does. Check both before you list.
What happens if a guest damages my unit and I have no STR coverage?
You pay out of pocket. Your condo corporation’s policy restores only the standard unit finishes, your personal policy may deny the claim as undisclosed commercial use, and AirCover only helps if the stay was on Airbnb and Airbnb approves the claim.
Hosting a Toronto condo and want it covered properly? Home Again Property Management handles Toronto’s licensing, your building’s guest rules, pricing, cleaning, and guest messaging — across Toronto, Mississauga, and Hamilton. Get in touch for a free revenue estimate.