In a Vancouver neighborhood where housing costs continue to climb, Melissa Chen parks her 2021 Honda Civic in her driveway on Friday evening. By Saturday morning, a stranger will be driving it to Whistler for the weekend, putting $120 in Chen’s pocket through a car-sharing app. Three kilometers away, Robert Jennings is preparing his backyard for eight campers who booked his space through an online platform, generating $500 for a single weekend.
Welcome to Canada’s booming peer-to-peer rental economy, where ordinary Canadians are turning personal assets into income streams—often without understanding the insurance implications that could leave them financially exposed.
“We’re seeing Canadians increasingly monetize their personal property—cars, backyards, swimming pools—but many don’t realize they’re creating significant liability gaps,” explains Kathryn Manley, insurance expert at the Insurance Bureau of Canada. “Most standard policies simply weren’t designed for commercial use of personal property.”
The numbers tell a compelling story. According to recent industry data, peer-to-peer car sharing services in Canada grew by 43% in 2023 alone, while backyard rentals for camping and events increased by 67% since 2021. These platforms have created an estimated $1.2 billion in supplemental income for Canadians navigating inflationary pressures.
For Toronto resident James Lowry, renting his backyard pool through an app called Swimply seemed like a perfect solution to offset maintenance costs. “The pool costs me about $4,000 annually to maintain. By renting it out 2-3 times weekly during summer, I’ve generated over $9,000,” Lowry shares. “But my insurance broker warned me my homeowner’s policy wouldn’t cover commercial activities.”
This warning represents a critical knowledge gap for many participants in the sharing economy. Standard personal insurance policies—whether for cars, homes, or other property—typically exclude coverage when that property is used for income-generating purposes.
Anne Morris, a senior broker at Urban Shield Insurance, explains the distinction: “Personal insurance and commercial insurance are fundamentally different products. When you rent your property, you’re essentially operating a micro-business, and personal policies have explicit exclusions for business activities.”
These exclusions can create devastating financial consequences. In 2022, a Calgary homeowner who rented his backyard for a wedding reception faced a $175,000 liability claim after a guest was injured on the property. His insurance company denied coverage, citing the commercial use exclusion in his homeowner’s policy.
Some sharing platforms offer supplemental insurance, but experts caution about limitations. “Platform insurance often has significant gaps or high deductibles,” warns Morris. “For example, many car-sharing platforms offer collision coverage but exclude liability coverage over certain amounts, potentially exposing vehicle owners to substantial claims.”
For Canadians considering joining the peer-to-peer rental economy, experts recommend several protective measures. First, contact your insurance provider before listing any property to understand existing coverage limitations. Second, consider specialized insurance products designed for sharing economy participants, which have emerged in recent years. Finally, thoroughly read platform insurance terms to identify potential gaps.
The Canada Revenue Agency (CRA) adds another layer of complexity. Income generated through property rentals is generally taxable, requiring proper documentation and reporting. “Many Canadians don’t realize they need to report this income, which can create tax compliance issues,” notes tax specialist Daniel Wong.
Despite these challenges, the personal property rental market continues to expand as Canadians seek additional income in an increasingly expensive economic landscape. For Winnipeg resident Sarah Thompson, who rents her driveway to downtown commuters, the financial benefits outweigh the complexities.
“After getting proper insurance and understanding the tax implications, I’m still netting about $320 monthly from my driveway rental,” Thompson explains. “In today’s economy, that covers my rising grocery bills.”
As this sector evolves, industry experts predict insurance providers will continue developing more tailored products for the sharing economy. Until then, Canadians venturing into property rentals face a clear imperative: understand your coverage before handing over your keys or opening your gate.
Will your insurance have your back when you need it most? For many Canadians monetizing personal property without proper coverage, that question remains dangerously unanswered.
